01 Aug Considering the impact of business beyond the quarterly report
“This was one of the sessions I was most excited about. Especially the in-class discussions were very interesting, such as about the unit for inequality measurement”, says Japanese Shizuka Pohl, Marketing Services Senior Specialist Schröder Investment Management in Luxembourg. American Benjamin Rethmel, International Relations Manager – Admissions for Audencia Business School in Nantes (France) agrees. “To truly prepare for the leadership roles of tomorrow, an exploration of international trade and the impact on inequality in the world is an important topic to cover during our studies.”
The session Globalisation, Inequality and Politics, by Dr. Kaj Thomsson – part of the module International Environment of Business – provided the students with a broad overview of the driving forces as well as the consequences of globalisation. Dr. Kaj Thomsson (Sweden) studied Economics at Stockholm University and Industrial Engineering & Management at the Royal Institute of Technology (Stockholm). At Yale University (US) he studied Philosophy & Economics and did a PhD in Economics. His primary research topics are political economy, history of economic institutions, emerging markets and applied game theory. He published in various scientific journals. Currently he is Director of the Bachelor of Economics at Maastricht University.
Growth matters, but only to some extent
Kay Thomsson hits off with exploring the definitions of globalisation and emerging markets. He explains that globalisation is not a new concept, however has taken on a new dimension in the past 70 years, mainly due to decolonisation, reforms in China, the collapse of the Soviet Union and the big outsourcing wave. Many aspects of globalisation pass by: emerging markets, poverty rates in various world regions, the relation between poverty and child mortality rates and the winners and losers in poverty reduction (China and India are winners and various not-yet-rich countries are catching up fast!). Kaj Thomsson also explains that although growth matters, it is not sufficient for broad-based development. Growth may reduce poverty to some extent, but can also increase inequality. He stated that it is crucial to understand the sources of sustained growth, also considering climate change. The question was raised that if developing countries will undergo a similar process of development as the richest countries, can the world even handle it? Also, the rise of emerging markets is, besides an economic, a political story. Kaj expects a bumpy road with quite a bit of political tension going forward. So, one of the key challenges is to ensure stability and sustainability along the development path.
Unit of inequality
Another key challenge concerns inequality within countries. The professor showed an insightful graph regarding the development of inequality in the past 100 years in various countries. The conclusion is that even when global inequality has decreased, inequality within counties has risen. An interesting discussion about inequality and fairness unfolds. When is inequality unfair? And how should (unfair) inequality be addressed? By redistribution, education, labor-strengthening policies and directly addressing globalisation. Although all ‘solutions’ can address inequality, each has a price. Shizuka: “I think this was a very valuable discussion. What does it truly mean to reduce inequality and where should the focus be in terms of the unit (family, company, village, region, country, continent, world?). It really depends on what we care about and the level of control we have on the different units.”
Other core challenges associated with globalisation are building strong societies that hold together despites differences, sustainability, the power game between the US and China and the risk of conflict on an intersection of problems. However, on the bright side, globalisation holds many opportunities too. Many emerging markets are now responding to environmental and social challenges with innovations, entrepreneurial talent and exciting sustainable start-ups.
Benjamin concludes: “I think that the course has given us a different perspective on the side effects of international trade. Often, business students are taught to consider free-trade between countries to be the absolute path to growth and opportunities for all involved but we have to consider the impact on the many different levels of society and realise that business can involve winners and losers. Businesses need leaders that can consider impacts beyond quarterly report and see the impact that they have on the communities and environments in which they do business.”
This article displays the student insights and experiences of our On-Campus MBA International Business Environment module. Our On-Campus track has an on campus learning format and is part of the executive modular part-time MaastrichtMBA programme. The programme has a Triple Crown accreditation and is aimed for professionals with at least 5 years of working experience.