Prime Minister Geir Haarde: A high level visit from Iceland

It was a great honor to have  Prime Minister of Iceland Geir  Haarde come to my seminar on Trade Insiders. PM Haarde was confronted with managing the deep recession in Iceland  of 2008. His presentation addressed the special links of macro and micro forces which had to be managed in order to restore trust in government and the economy. A true insight of national impact in a multilateral world!

Birmingham Insights on Asia – (4) International Strategic Alliance Performance (High Technology Industry in Taiwan)


This comment is based on Jo-Chun Chieh’s Dissertation written under the supervision of Prof. Michael Czinkota at the University of Birmingham, UK.

3, Organizational culture differences have more influence than national culture differences on International Strategic Alliance (ISA) performance, from the Taiwanese managers’ perspective. Two of the organizational cultural dimensions, professional and pragmatic orientation, ranked as the first two elements of importance when cooperating with a foreign partner, while two of the national cultural dimensions, uncertainty avoidance, long-term orientation, was ranked subsequently. Pothukuchi et al. (2002) addressed a similar concept with differences in organizational culture, compared to differences in national culture, considerably facilitating conflict and impeding cooperation between alliance partners.

4, The study justifies  that ISA practice indeed significantly interferes with the relationship between culture differences and iSA performance. John (1984) indicates that long and sticky partnership between cooperative enterprises reduces that potential for opportunistic behavior while the dissolution of a partnership often leads to poor decision-marketing, interaction and management of inter-organizational relationships. Complementary resources, absorptive capacity, commitment, and trust are important willingness to work together (Day & Klein, 1987). This partnership can evolve positive or negative consequences, depending on how Taiwanese managers implement their managerial practices with foreign partners.

Related Article: Birmingham Insights on Asia – (3) International Strategic Alliance Performance (High Technology Industry in Taiwan)

Birmingham Insights on Asia – (3) International Strategic Alliance Performance (High Technology Industry in Taiwan)


This comment is based on Jo-Chun Chieh’s Dissertation written under the supervision of Prof. Michael Czinkota at the University of Birmingham, UK.

The study investigated the perspective of Taiwanese managers, thereby examining the impact of national and organizational culture differences and International Strategic Alliance (ISA) practices on ISA performance. Four findings can be concluded as follows.

1, National culture differences partly influence ISA performance, especially in the uncertainty avoidance and long-term orientation dimensions. This finding corresponds to one of the cultural functions proposed by Schneider (1989). He states that culture serves two functions, to solve external adaptation and internal integration problems. Uncertainty avoidance and long-term orientation especially impact on external adaptation. In other words, Taiwanese managers in the high-technology industry emphasize and are good t coping with opportunities and threats from the external environment, as well as being good at developing ISA strategies with foreign alliance partners. on the other hand, power distance, individualism and masculinity influence employee relationships within an organization.

2, Organizational culture differences also partly influence ISA performance, especially in professional and pragmatic (market -oriented) dimensions. Kasper (2001) associates corporate culture and market orientation, claiming that “market oriented organizations are open, employee-oriented, results-oriented, pragmatic, professional…”. This finding reflects that Taiwanese managers in the high-technology industry emphasize the importance of building objectives and obtaining new knowledge when cooperating with ISA foreign partners. Kasper (2001) also associates innovation, stating that customer contacts and customer participation in the R&D procedure are the basis of innovation. This notion implies that Taiwanese managers have high consciousness about global competition and pay attention on balancing innovation and market orientation.

Stay tuned for two more conclusions on our next Birmingham Insights on Asia.

Treasury Yields at Almost 15-Year High Versus Bunds

A gauge of expectations for consumer prices over 10 years climbed to the highest in five months before Federal Reserve officials including Fed Bank of Philadelphia President Charles Plosser speak this week with markets indicating about a 60 percent chance interest rates will rise by July next year. European Central Bank President Mario Draghi signaled rates will probably remain low for at least 2 1/2 years.

“That Treasuries are still trading so cheap relative to what you can get in Europe continues to keep U.S. debt so well bid, especially when you factor in the lack of growth or inflation pressures,” said Thomas Tucci, managing director and head of Treasury trading in New York at CIBC World Markets Corp. “The major question this week will be how well the auctions go will after last week’s Federal Open Market Committee meeting.”

The gap will widen to 137 basis points by the end of this year, according to the weighted average of analyst estimates compiled by Bloomberg.

Government data due on June 26 will show the Fed’s preferred measure of inflation rose to the highest since October 2012, analysts said.

The Fed’s 2 percent inflation goal is based on the personal consumption expenditures price index, which rose 1.8 percent last month from a year earlier, according to the median estimate of economists and strategists in a Bloomberg survey before the data on June 26. That’s after a 1.6 percent gain in April.

In the past 13 months, the gap between yields of two- and five-year Treasuries has doubled to 1.22 percentage points, according to data compiled by Bloomberg. At the same time, the difference between those of five- and 30-year securities has narrowed to the least since 2009 as the long bond rallied.

Full Article here.

Forbes: Global High Performers

Scott DeCarlo

Scott DeCarlo, Forbes Staff

These Global High Performers has been expanding their earnings at 23% annually and returned an average 16% to shareholders over the past five years. To find such examples, we did a careful search of the Forbes Global 2000–our list of the world’s largest companies based on a composite ranking of sales, profits, assets and market value–in order to identify companies that are global superstars in every sense. 

We analyzed 26 industries (excluding trading companies) of the Global 2000 and scored each company on long-term and short-term sales growth, profit growth, return on capital and total return to shareholders. We also factored in earnings forecasts and used outside research to help weed out seemingly strong but dicey entities. Once we generated our industry-specific rankings of fast-growing global companies, we carefully went through each industry to select the best five companies in each group. Companies must have sales of at least $1 billion and positive equity. Non-U.S. companies must trade in the U.S. as ordinary shares or American Depositary Receipts.

These companies are considered global for a few reasons–they trade in the U.S. as well as trade in their local market and earn an average 56% of their sales outside their domestic country. These global firms, India’s Infosys Technologies, Israel’s Teva Pharmaceuticals and U.S.-based First Solar, generate a majority of their sales outside their homeland.

Almost half of the companies on this year’s list are returning from last year. Among this group— América Móvil of Mexico, controlled by the world’s richest man Carlos Slim, with average five-year sales and earnings growth over 20% and U.S.-based MasterCard, with an average five-year earnings growth of 61%.

In Pictures: Industry Leaders

Some of the best-performing companies on the list produced record years in sales and earnings. They include Japan’s Belle International, U.S.-basedCelgene and India’s Tata Motors.

As a group, the five companies in the Chemicals industry-BASFMosaic,Potash of SaskatchewanSyngenta and Yara International–has the best five-year annualized total return (32%). The Technology industry as a group has the best five-year average sales (52%) and earnings (46%) growth-AmphenolAppleFirst SolarWestern Digital and Research in Motion. According to Thomson Reuters IBES consensus estimates, the Consumer Durables industry as a group-BMW Group, Johnson Controls,Michelin GroupTata Motors and TRW Automotive Holdings-are expected to see earnings grow the most annually over the next three-to-five years (32%).

There is value on this list for investors.  We looked at price to book value. The metric may not be perfect, but it’s one that many value investors and contrarians use in their research. Book value, roughly speaking, is a company’s assets less its liabilities. So the lower the price-to-book ratio, the cheaper a company looks relative to its net worth. The price-to-book multiples for these three stocks are all under 1.0 and stand at a discount to five-year historic averages—Hong Kong’s Swire Pacific, France’s GDF Suez and U.S.-based BlackRock.

On average, last year’s list of Global High Performers are up 17% over the past year, outperforming the S&P 500 (up 14%) over the same time period., McDermott International and Genting led all companies in price performance.

On our list, 69 of the 130 companies have headquarters outside the U.S. and includes global brand names, such as Spain’s TelefónicaNestlé(Switzerland) and Christian Dior (France); as well as foreign companies with lower profiles, such as Denmark biotech, Novozymes. Among notable U.S. Global High Performers are Walt Disney, Google, McDonald’sandNike.