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Introduction

In the Wizard of Oz, Dorothy’s character famously says “We’re not in Kansas anymore.” J. Stewart Black, Allen J. Morrison, and Hal B. Gregersen present a similar sobering reality about the lack of talent in global leadership. They highlight four dynamics that shape global leadership: country affiliation, industry knowledge, host country culture, and functional responsibilities.

Facts and Truth

Facts form the basis of truth, but different national cultures may interpret the same facts differently. This highlights the complexity of international commerce and the challenges of mastering it. Success in this field requires transformational leadership, as global activity is constantly changing. Aspiring entrepreneurs must find ways to create value beyond their home country borders.

American Market Potential

The United States excels as a consumer market, but lags behind as a producer of global products. The majority of the U.S. workforce is employed in service industries, and the country has had a trade deficit since 1976. Despite small businesses being major job creators, the U.S. market has been enough to keep them occupied. However, with the U.S. only representing a third of the world’s population, exploring international markets like Oz could lead to greater market potential.

Different Markets in First, Second, and Third World Countries

First world countries, similar to the U.S., have similarities in terms of material conditions and legal systems influenced by the Judeo-Christian tradition. Second world economies like China are adopting capitalist aspects, creating opportunities for market penetration. However, western countries are cautious about sharing intellectual property in these markets due to concerns about piracy. Third world countries, already prime markets for certain U.S. industries, present additional challenges with their theocratic laws. As these countries develop, more opportunities await U.S.-based global leaders.

Pursuing Opportunities in Oz

Successful international strategies follow Richard L. Daft’s four stages of development: domestic, international, multinational, and global. For aspiring global entrepreneurs, entering the international stage is like embarking on the yellow brick road. Critical thinking questions can help protect them from unrealistic expectations and guide their decision-making, such as understanding the value proposition for foreign customers, identifying target markets, considering regulatory requirements, and addressing environmental concerns.

Approaching Oz

Once primary markets are identified, there are various ways to enter a country. Pure exporting is the simplest form, requiring knowledge of trade finance and potentially offering credit terms. Establishing a distributor, forming joint ventures or strategic alliances, or establishing a legal entity or acquiring an existing one are other options. Foreign direct investment, or owning operations in a host country, poses unique challenges related to leadership and integration.

Understanding Oz

Things are different in Oz compared to Dorothy’s hometown of Kansas. Different worldviews, including religion, science, philosophy, and daily life, shape human interactions. Critical thinking and understanding cultural differences are crucial for successful international interactions. Immersion experiences in the host country, language proficiency, and cultural mentorship can help navigate these differences and avoid miscues. Building relationships and understanding local nuances are essential for global executives.
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Ihab Salloum