The other night, I listened to a speech by a good friend of mine, Dave Iwinski, who spoke to my Duquesne students about international business.

It’s funny, when I was just getting started, I was fascinated by the idea of doing business overseas. So fascinated in fact that I fabricated a kind of outsource contract with an international foundation. This in turn allowed me to travel the globe, and I took full advantage of this privilege. I spent time in the Far East, South America, and Europe. Just in my early 20’s, I was negotiating with both diplomats and heads of major companies in more than two dozen countries.

I was also responsible for putting together what was, and up until that time, the largest trade show ever conducted south of the Rio Grande River. Because this trade show was in Central America, I had no political restrictions on who could participate. Thus, we had exhibitors from behind the Iron Curtain, including companies from East Germany, Romania, and Russia (remember, this was 1974).

I arrived a full three weeks before the show. In all, there were 117 companies sending equipment (all related to printing and graphic arts). As the opening date for the show approached, almost all of the hardware (including some huge web presses that could fully occupy a 5,000 sq. foot space) was sitting in the local customs warehouse (a.k.a., the “aduana”). I simply could not get the host government to issue the paperwork to release what constituted impounded equipment. So, I called back to the U.S., and talked to a gentleman who had previously run a major international corporation. Even though this man is now deceased, it is best that I don’t provide his name. When I told him of my dilemma, he responded, “But have you bribed them yet?” I responded, “No, this has not even crossed my mind.”

“Well, then, bribe them!”, he practically screamed, “Where the hell do you think you are, Chicago?”

That was a lot of years ago, but I managed to scrape together 100,000 pesos, or whatever the currency was in that country, and the doors of the aduana opened literally minutes later.

That was then. Today, the United States is no longer the world’s hulking giant, and business is not necessarily still conducted the way I did it in 1974.

It’s no secret that we Americans are right now up against formidable competition. Our competitors are both hungry and smart. This does not mean that we have to shrink in fear of them, but it does mean that the game is much more difficult today than it was just after World War II.

Two countries that must be dealt with are India and China. My first exposure to Indian initiative came when I joined Sunil Wadhwani and Ashok Trivedi in Mastech Corporation in the late 1980’s. I used to work a lot on the weekends then, and I’ll never forget the second Sunday I was there. It was about noon when a car pulled up and disgorged no less than nine Indians. It reminded me of one of those clown acts at the circus. These people proceeded to work until way past midnight. During the late afternoon, I engaged one of them in conversation, asking about their incredible work ethic. His response was, “I hope I never leave this country. Your skies are clean, your water clear, and your roads safe. That alone makes it all worth staying.”

Today, India is a country of 1.3 billion with 70 percent of those people being less than 36 years old. India’s economy has doubled since the beginning of what Indians call, “The Reform,” in 1991. Doubled.

The service sector has led the growth of the Indian economy, increasing by about 7 percent annually, also since 1991.

Indians pride themselves on education, and it’s not all that unusual to meet an Indian with multiple advanced degrees. The Indian Institute of Technology (IIT) takes a backseat to no American university, including MIT, CAL Tech, and CMU.

Today, China is the third largest economy in the world. Their average annual GDP growth rate from 1978 through 2004 was 9.6 percent. That’s almost incomprehensible. Just what you and I would consider to be the “middle class” of China is larger than the entire population of the United States and Canada. Just the middle class. Finally, and while we Americans still envisage China as a poverty-riddled nation, you’ll probably be surprised to learn that, and from 1981 to 2005, the poverty rate in China fell from 53 percent to just 2.5 percent.

Here’s a name you need to remember … Fons Trompenaars. I’ll just call him, “Fons.” Mr. Fons is renowned for his studies of multi-cultural issues. Dave Iwinski spent the better part of an hour on Trompenaars’ theories, leading off by giving my class the following scenario:

• An individual and his best friend are in a car together.
• The individual is driving and the best friend is in the front passenger seat.
• They’re in a school zone, with a 25 MPH speed limit.
• The individual driving is going 35 MPH, and the friend leans over and points out this fact to the driver. The driver does not decrease his speed.
• In the blink of an eye, a young child darts out between two parked cars.
• The driver hits and kills the child.

In what we refer to as the “western world,” when asked to take the role of the passenger, individuals in every single country (including the U.K., Sweden, Ireland, Canada, U.S., and Switzerland) would flat-out tell the truth more than 90 percent of the time, even though this truth-telling indicts their best friend.

When this same situation occurs in Far Eastern nations (Korea, Japan, China, India, and Indonesia), the best friend “bends” the truth more than 50 percent of the time, in effect exculpating their friend.

Trompenaars calls this universalism (the need to tell the truth) versus particularism. We would probably more likely refer to this as, “Situational Ethics”. The Fons goes on to theorize why these differences exist, especially so blatantly in the different regions of the world. (By the way, the Swiss are incredibly truthful, they almost always are at the very top of the polls when it comes to universalistic behavior --- in other words, the Swiss almost always tell the truth!).

After much study, Fons concluded that this behavior could only relate to the fact that these disparate parts of the world have completely different kinds of governments. In the westernized countries, governments have been stable (current times excluded) and therefore extremely (and relatively) trustworthy. Because they are so trusted, citizens living in these countries feel as if there will always be an impartial and fair airing of the facts, resulting in an equitable and honest resolution.

Conversely, individuals living in countries where the government is less stable learn that it is best to build alliances and relationships with one another. This then gives them their best chance of surviving.

I bring Mr. Trompenaars into the discussion because, and as David Iwinski himself put it, “I chuckle when I’m on an airplane headed to the Far East and I see my seat-mate reading a book entitled, ‘How To Do Business in Hong Kong’. While these books have some merit, the advice I give relates more towards making sure that the individual instead just build strong relationships while in that country. This, more than anything else, will serve them well.”

Iwinski also spent time dispelling the notion that “The Communists” still hold sway over Chinese businesses. What struck me from Dave’s comments was the fact that the Chinese Communists, while still in existence, today constitute less than one-half of one percent of China’s populace (given the total number of Chinese, this is still a significant number), it is pure, unadulterated capitalism that is today making this part of the world go and grow. Iwinski related a very interesting story about how he was able to more or less influence a party official in whose hands David’s future ability to get gas, electricity, and water for his new manufacturing plant rested. Too lengthy to relate here, this story confirmed to me something that I’ve always believed … that being the fact that on an individual level, all people, all the world over, have the same individual drives, fears, and dreams. They just want to provide for their families and go to their grave being known as a good person.

David and I will be talking more about his decade overseas the next time he’s on my radio show. I hope you’ll then take the time to tune us in and learn more about the parts of the world that your children and their children will invariably be dependent upon for their future income and, more likely, relationships.