University of Vienna Interview with Executive Director, Professor S. Tamer Cavusgil

How did you start working in the area of International Business and why?

I started my career in the late 1970s. At the time, globalization was not in the daily vocabulary. International business activity was more or less limited to MNEs from the Triad – North America, Western Europe and Japan. While studying economics and business at the University of Wisconsin, a conversation with one of my MBA faculty, Professor Warren J. Bilkey who later became my mentor, led to my almost accidental involvement in academia.  His invitation to sit in his PhD seminar, and my desire to think deeply about business phenomena, led me to join the doctoral program. I really enjoyed the intellectual discourse and research inquiry that was taking place in the doctoral seminars.

Starting my academic career, first at my alma mater in Turkey (METU) and then back at the University of Wisconsin, I first taught marketing. When the department chair was looking for somebody to teach international marketing/business, I must have appeared sufficiently ‘qualified’; after all I was born in another country and had traveled internationally! 

Nevertheless, my timing to delve deeper into the international business discipline turned out to be perfect. As the 1980s rolled in, and the age of Internet and communications advances arrived, international business became a popular topic in business schools. We witnessed growing economic interconnectedness among countries, and cross-border trade and investment spiraled. A robust, new phase of globalization had arrived. 

Early in my career, I did some work for WTO (International Trade Center) in training of trainers. These projects gave me the opportunity to travel through various emerging markets in Asia. This exposure to a variety of cultures enabled me to understand my own background better, as I now had developed a broader frame of reference. As it often happens, when you step out of your own environment, you gain an appreciation and a frame of reference to put things in perspective. You learn that cross-cultural differences are not necessarily good or bad, but they are there for personal enrichment.

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What do you consider your key contributions?

Most people would probably consider my publications — over 200 refereed articles and books — to be my prized contribution, but I have an entirely different benchmark. I believe that my most important contribution has been the opportunity to mentor countless young people and, in particular, over 35 doctoral students. Almost all of my former doctoral students have now become successful educators and scholars in their own right, in turn nurturing successive generations. I firmly believe that this is the most proud legacy I can claim.

Throughout my career, I had one foot firmly in business practice. I love speaking to and brainstorming with business executives. Perhaps as a result, I may have developed an ability to recognize megatrends emerging in the horizon. In my research I was able to identify key trends in the world of economy and be among the pioneering scholars researching cutting-edge topics. For example, when most early IB scholars were squarely focused on multinational company activity, I began researching the practices of medium sized firms and their export activities. Similarly, noticing the rise of smaller, entrepreneurial start-ups going international almost from inception, we carried out one of the earliest formal investigations of these enterprises which, today, we call Born Global firms.

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What fascinates you today in IB?

One thing we clearly recognize today is that the distinction between domestic and international (business) has become blurry. While in the U.S. we still make such a distinction, primarily because there is a huge domestic market, most practitioners appreciate that they need to acquire a global mindset and perspective.

In practice, this distinction has diminished over time. As far as strategic planning is concerned, firms no longer make this distinction. They are just looking where the best prospects are for their organizations, whether they are abroad or at home in the domestic market. And for some firms, going international is the only option for pursuing growth.

Another fascinating aspect is the dimensionality of what moves across national borders. Take a look at what is getting exchanged across national borders. In the past, it was mostly goods and services. But today there is more connectivity such as capital, technology, data, knowledge and people. Mobility has taken on a new meaning.

Throughout the last decade we have witnessed a digital revolution, together with advances in other technologies. These can be facilitators for international business activity and vice versa. Also, they have very remarkably changed the international business scene, in terms of evidence-based decision making and data analytics. This has also reached academia; think about how we used to survey, say 200 consumers or managers, and base our decisions on that. Today, we can go beyond that, as we have access to big data and you can uncover really fascinating relationships.

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How did IB change throughout the past decade?

We have seen remarkable changes in the pace of globalization. Some phases were extremely rapid, but there are also periods in which globalization has slowed down, and even challenged. Since the 1980s we have seen a steady increase in the pace of globalization — by this I mean a steady rise in trade and investment. We have seen it grow at a spectacular rate until the most recent decade, when we faced sort of a de-globalization. This is because of political unrest, conflicts, nationalistic sentiments, and corrupt regimes. We are now witnessing a dominance of nationalism, trade wars, and retrenchment. Nevertheless, this is only a phase; we will always have these periods of acceleration and deceleration of globalization. 

Today, multinational firms are also subject to greater demands for social accountability and sustainability. The bar for firms to acquire their social contract to operate across national borders has definitely been raised.

Another phenomenon is the risk environment; we have seen very drastic and frequent disruptions of all sorts, so risks that had to be managed.  Very quickly, risk management and mitigation have risen to the top of the agenda for senior management and board of directors. 

What we also have seen in the past several decades is the rise of emerging markets in international business. These rapidly transforming economies have become the focus of most companies in all industries in terms of trade, investment and sourcing.

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How do you see the future of IB? Please provide three future research priorities.

Emerging markets are still a very interesting field to be studied. Risk mitigation in international markets also needs to be further investigated, as company risks continue to proliferate and have detrimental impact on business performance and survival. Answers are needed about where you place risk management in a company, who is responsible for it, what is the cost of not responding to risks.

Another topic is the rise and evolution of digital startups and this relates to entrepreneurship. What motivates entrepreneurs to start digital businesses, how do these motivations differ between, let’s say, an Austrian start up versus a Chinese start up? What are the trajectories and what happens to them when they evolve and grow? There are numerous interesting questions that must be addressed in this context.

Companies, NGOs and governments will also be increasingly affected by requirements for social responsibility and sustainability. The sensitivity of customers, governments and suppliers to social responsibility is rising.

Also, the rising inequality of income in many economies is a critical societal challenge and, therefore, worthy of formal study. This societal dilemma is not necessarily restricted to the U.S. but also other advanced economies as well as emerging markets. It is disturbing to see that the middle class which had been rising in most emerging markets has now been reversed. It is discomforting to observe shrinkage of middle class. Thus this raises the question of why the income gap has widened in both advanced as well as emerging economies. Is it tax policies, government strategies, or is it globalization itself? And what are the consequences of income inequality?

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Why should students study international business?

First, IB is life enriching. It is also an eclectic discipline. When you examine an IB phenomenon, you must reach deep into social sciences and be informed by multiple perspectives.

Second, IB is also a very gratifying field of study, as it makes you develop personally. You become more observant and balanced, cognizant of the diverse world around you. This adds a certain degree of richness, because it makes your inquiry more interesting and intriguing.

Third, as I mentioned before, IB gives us a much deeper understanding of our own culture. One can only fully understand one’s own background once you step outside of it.

Final reason to study IB is much more practical: there are very fulfilling careers in IB — in private companies, nonprofits, public policy, thinktanks, media, and even art. International business is ubiquitous – most phenomena have cross-cultural, comparative, or international explanations. So, if someone is looking for a rewarding and gratifying career, international business certainly provides that.

This interview was conducted by Sophie Ladurner on behalf of the Chair of International Business on 30th March 2020

link:https://international-business.univie.ac.at/expert-corner/tamer-cavusgil/