Global Power Struggles

chinese cover

Two news stories grabbed my attention over the last few days.  In my opinion both are indicative of a where we are with globalisation and the shifting powerbases of the global economy.  First, Apple apologised for the perception that they showed arrogance to their Chinese customers.  Secondly, The Indian Government refused to extend the patent of a cancer drug made by Swiss Pharmaceutical giant, Novartis.

heartless apple

Apples put intellectual property rights above the welfare of the Chinese staff.

So why am I comparing these two seemingly unrelated news stories?  Let’s start with Apple.  Apple’s recent phenomenal success and deep market penetration in the consumer electronics market has meant that in mid 2012 they became the world’s largest company by value, although the share price has fallen recently, it remains the world’s largest technology company by some distance.  They have achieved this success despite criticisms of their iTunes software (that for several years prevented Apple mp3 files being played on other makes of mp3 players), poor reviews of some of the earlier versions of their iPhone (which were no good for making phone calls!), supply problems with the iPad and significant concerns about conditions in the Foxconn factories in Shenzhen, China where Apple equipment is assembled.  Here multiple suicides led to an investigation of the long hours, labour camp culture of the plant that – which apparently put the protection of Apples intellectual property rights above the welfare of the Chinese staff.  Each one of these problems has been overcome or ignored.  It appeared that Apple’s reputation was indestructible as their growth continued.

Apple sad

Tim Cook had to apologize for Apple being arrogant.

However, in mid-March 2013, something changed.  The state controlled media in China started openly criticising Apple.  China Central TV highlighted over 2000 complaints about Apple not honouring warranty agreements in China, later the Peoples’ Daily newspaper ran a story about Apple exploiting Chinese workers and behaving with arrogance to Chinese customers.  As a result Apple’s Chief Executive, Tim Cook issued an apology for any misunderstandings and the perception that Apple was arrogant.

novartis patents

Novartis currently faces public opposition in India.

Meanwhile at the start of April in India, the Indian Government rejected a request by Novartis to extend the patent for the cancer drug Gilvec, after they made what was reported to be a minor modification to their drug.  Novartis one of the world’s top 5 pharmaceutical companies is not happy with the ruling, as it means lower cost generic versions of the leukaemia drug can be made and sold in India and beyond India by Indian companies, denting their profits.  On the other hand, health care providers and patients are delighted because it means more people can be treated for leukaemia in India, and potentially other emerging economies where individuals are expected to pay their own drug costs (rather than through insurance based or tax funded healthcare systems more common in the developed economies).

GNP 2050

According to projections of Goldman Sachs, China will have overtaken the United States in GNP by 2050.

So what is the link?  Well China is expected to be Apple’s largest market within a year or two.  India is the world’s fastest growing market for pharmaceutical products.  These two news stories suggest that governments in the two countries are less beholden to the power of the global multi-nationals than their equivalents in the previously all powerful triad of North America, Europe and Japan.  Perhaps this represents a turning point?  Does it mean that governments in the increasingly powerful BRIC (Brazil, Russia, India and China) or MIKT countries (Mexico, Indonesia, South Korea and Turkey) will be able to have a bigger stake in the globalised economy?   It will be interesting to see what happens next.  Big Pharma and consumer electronics giants like Apple cannot afford to ignore the emerging markets.  If they are going to keep supplying their shareholders with dividends then they will have to chase sales in emerging economies.  However, to do so they may have to operate to a different set of norms and be a little less arrogant about how they do it.

Philip Warwick

Durham University Business School

PhilipWarwickPhilip Warwick

Senior Teaching Fellow
Durham University Business School

Prior to entering academic life Philip spent 17 years working as a manager in the National Health Service (NHS) in Yorkshire and the north east of England. While still a manager in the NHS he studied for a part-time MBA at Durham Business School. In 2000, he joined the University of York, where he stayed until moving to Durham in autumn 2012.

Philip has two main areas of research interest and activity, public sector strategy and internationalisation and the scholarship of teaching and learning. His public sector strategy interest encompasses health service management and university management, in particular the international business in higher education, which is the subject of his doctoral research. Much of his work in the field of teaching and learning also relates to internationalising teaching and learning, making teaching and learning more appropriate and relevant to an international audience.

See also:

The Internationalisation of UK Universities – a progress report

Cover picThis week, Philip Warwick, Senior Teaching Fellow at Durham University Business School, UK, writes at guest blog on the state of internationalisation in British universities. Professor Warwick has been studying the international strategies of a number of universities in the UK and in other countries. He has found that approaches vary across countries. Within the UK he has identified four specific strategies to international development within the group of universities he studied.

Does management work and does it have a future?

Cover pictureI recently completed some research on the management and organisation of British universities, which concluded that despite being full of good intentions (in this case to internationalise their offering) they lacked the management experience and know-how to implement the changes necessary to implement their strategies. Whilst it seemed fairly clear to me that what they needed to do was improve their management knowledge and know-how, it did not feel entirely comfortable for me to be saying this. After all I work at a Business School, one of whose primary functions is to provide management education to help managers develop their knowledge and know-how.

AACSB Associate Deans Conference: Leadership Skills and Strategies (David Logan: CultureSync & USC Marshall School of Business)

David Logan CultureSync and Senior Partner, USCAt the AACSB Associate Deans Conference 2012 David Logan, Senior Partner, CultureSync and Lecturer, Marshall School of Business, University of Southern California, gave a highly entertaining talk about dealing with ‘tribes’ in organizations. The title of the talk was “Leadership Skills and Strategies: Techniques and Tools on Leveraging Group Dynamics” and it gave some useful advice on how we can teach groups to develop a more positive attitude to their work.

From Harvard to GEM: Co-teaching on Strategic Management and Leadership

2012-11-30 14.02.39It was a great pleasure during the last semester to share a class at Grenoble EM with Dr. Gregg Glover. Gregg has been a good friend for many years (though he might deny this!) and I am delighted he accepted our invitation.

He did his doctorate in organization change at Harvard University and has worked there for over 25 years. He was able to bring his vast teaching and professional experience to the class and share some of the things he has learned and studied while working for the world’s most known university. Read more…

AACSB Associate Deans Conference 2012: Lessons from Change in Business Schools

MainOne of the opening sessions of the AACSB Conference for Associate Deans Conference brought together panelists from 4 business schools; Latha Ramchand, Dean at the University of Houston, Lynne Richardson, Dean at the University of Mary Washington, Deborah Spake, Associate Dean at the University of Alabama and Kristie Oglivie, Interim Associate Dean at California State University. The Panel was chaired by Susan McTiernan, Associate Dean at Quinnipiac University and Vice Chair of the Associate Deans Affinity Group.

Higher education facts and figures 2012

Universities UK Blog: “Every year, Universities UK produces an annual collection of facts and figures on UK higher education institutions. This publication always proves very popular, as it presents a vast range of information in bite size chunks, providing readers with an overview of higher education in the UK, covering the student population, staff population and finances.”

Are home students being rejected in place of wealthy international students?

Universities UK Blog: “It is true that higher education is becoming increasingly global; there are growing numbers of overseas students who choose to study in the UK. This is hardly surprising given the UK’s leading reputation for higher education and the global rise in the numbers of tertiary students wanting to study outside of their home nation.”

Rising student expectations? University international offices know all about it.

UniversitiesUK: “Don’t you just hate it when university and student leaders say: ‘Now that students are paying high fees…’? Where have these people been for the last 30 years? It seems too easy to forget that international students studying in British universities have been paying fees since the 1980s.”

Cause for concern? The Bologna Process and the UK’s international student market

GlobalHigherEd: “A report by the Higher Education Policy Institute (HEPI) questioning the implications of the Bologna Process on the UK’s international student market set of alarm bells in the UK media last week. For example, the Guardian (May 22) declared, “UK universities at risk of losing foreign students as a result of the Bologna process.”

How dependent on foreign (non-EU) student fees is the UK (2010-2011)?

GlobalHigherEd: Income from HE course fees by country of HE institution 2010/11 – table

Cover
 One of the great man’s last works. Contains the concept of N=1; R=G. An excellent history of finance. Easy to read and lots of interesting examples.
Wonderful essay that lays out the benefits of international trade.

2 Comments

Filed under Asia, Business, China, Economics, Guest Authors, India, Management

2 responses to “Global Power Struggles

  1. Pingback: BOOK REVIEW: “How Countries Compete: Strategy, Structure, and Government in the Global Economy” by Richard Vietor (2007) | GlobalEd

  2. Pingback: BOOK REVIEW: “When China Rules the World, the end of the western world and the birth of a new global order (second edition)” by Martin Jacques (2012) | GlobalEd

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