Managing In A Global Economy

Larry Price
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Wednesday - May 30, 2007
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Hawaii is changing so rapidly it is posing a problem for government and international business.

Most companies achieve success by their ability to manage and market overseas. Can you imagine how difficult it must be for a global company based in Texas or New York to groom a manager from the home office to handle a company in Hawaii, Guam, Samoa, Tonga or Tahiti?

People always remind us that Hawaii is unique. They say it so often it loses its true meaning. The truth is, managing and marketing are different in Hawaii. Those who don’t realize it don’t last long.

But it’s not impossible. A lot of companies choose the right manager, but not all of them do.

A good example is the real estate business. When property is put on the market in Hawaii, people all over the world are interested. Investors from Japan, Korea, China, New York, California, Germany, France - just about everywhere - are interested in a good deal in Hawaii. The same is just not true for a piece of real estate in Kansas or Nebraska.

We also have problems with huge construction projects other people don’t usually experience. In point of fact, last week the international media announced that Japan will spend $6 million to help the United States relocate 15,000 U.S. Marines from Japan and Okinawa to Guam, because the Japanese are going to take more responsibility for their national defense. It means a big boom for Guam real estate and construction, because they are going to need housing for the troops and their dependents. Remember now, Guam is the size of Molokai, and it’s interesting to note that they are going to probably experience the same resistance the residents of Molokai have exhibited when approached with any new sprawling development.

It’s not a small problem, because Oahu is experiencing a boom for military housing and affordable housing at the same time, and construction workers are scarce. These companies operating multiple units abroad do not have the luxury of dealing with a well-defined set of economic, cultural and legal variables. Our workers’ compensation laws are unique, to be sure. Understanding the Davis-Bacon Act is enough to give any developer of military projects cause to pause.

And just as legal difference between states and countries exist, so do cultural differences. Countries differ widely in their cultures, which are the basic values of their citizens. Cultural differences from country to country are going to necessitate corresponding differences in management practice among a company’s subsidiaries. The differences in labor costs are staggering, as is the difference in the way some countries depend on work councils instead of the informal union-based mediations that are so typical.

If you imagine yourself being selected as an employee for one of these companies and landing a choice job in the future, be prepared. The criteria they use to select employees include personal interviews, performing technical requirements of the job and proven work experience in a similar job at the top.

“Who you know” will not gain you employment. “Being at the right place at the right time” and “luck” will not work either. Those are all urban myths our xenophobic society has embraced over the years.

For people who are born and raised here, a simple warning should be considered as the Hawaii real estate and construction industry prepare to take off. If you want to survive, you can’t communicate enough.

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