Perfecting the art of international management & investment.

• Author: Stewart, Ireland J.
• Position: Business & Finance

THE GENERALLY ACCEPTED DEFINITION of a well-managed company is one with high consumer satisfaction, good employee ratings, strong earnings, a solid balance sheet, an increasing worldwide market share, and a record of continually successful product development coupled with innovative marketing. Additionally, the company's record of success must extend over a period of at least 10 years (20 is even better), and it has to show continuous improved performance in its key indicators relative to its nearest competitors.

How is it that some companies not only achieve a reputation for being internationally well managed, but a record that signifies the reputation is deserved while other companies fail? Why is it that some countries show higher rates of increasing real growth compared to other nations?

Management must be committed to ideas of competitiveness, continuous improvement, performance measurement, customer satisfaction, and a willingness and capability to take risks. Creativity and the ability to correlate some not-too-obvious relationships, particularly in the marketing arena, are other key determinants of corporate success. The ability to motivate people, not just to work intelligently, but with an outward-looking focus (especially in a global sense) is another key element in generating success.

It also can be argued--at least on a global basis--that, by itself, even possessing the most outstanding management may not be sufficient for a company to be successful. Elements such as infrastructure, general education levels, willingness of the workforce to be effective producers, lack of government interference in areas in which it lacks expertise, and a noncorrupted reward system are vital considerations for a well-managed company in a global context.

In many instances, if an inefficient or inadequate central system poses too many constraints on an individual's ability to grow in the context of international market opportunity, migration of talent occurs. Management and entrepreneurial talent tend to move where it has the most likelihood of the greatest return. Thus, it is not surprising, in the absence of significant language or other barriers, that talented people usually go where there are the fewest roadblocks to success. The U.S., with its largely open economy, has been quite proficient in drawing outstanding people from all over the world to its shores.

Israel, too, has benefited from the importation of talent. Despite its small size, that country has one of the world's most advanced economies, specializing in computers, medical and information technology development, defense systems, and biological sciences. This process of becoming a high-tech society was spurred significantly by the large migration of well-educated Russian Jews to Israel after the collapse of the Soviet Union in the late 1980s. Clearly, people moved for the opportunity to be free politically, but also by the desire to participate in an open economy where they could earn market-based income for their talents.

Ireland's resurgence

The Republic of Ireland is another example of a country undergoing significant social and economic change. For years, Ireland had suffered extensive mass migration of its young people. The result was a stagnant economy and a sense of futility--both about staying in Ireland and the value of education. However, thanks to changes that encourage free enterprise...