Submitted by: Raquel Rusing

I just wanted to share this with everyone because I thought it was relevant and humorous. I ordered my business cards for the Chindia excursion from a site called VistaPrint.com. I’d consider myself capable of navigating a website, but somehow this site, with all of its advertisements (which probably is the explanation for the amazingly cheap purchase and high quantity of cards I could order!), completely confused me. Trust me, it was a difficult checkout. I had to customize my business card, enter my credit card information and then I had to launch my own “Just Say No To Advertisements!” campaign before I was allowed to proceed to place the order! The entire time, the formatting of this site was so confusing that I didn’t even know what to actually click to move forward. So, at the end, when I didn’t see anything that said, “Complete Order,” I did the stupid and impatient American thing.. press EVERYTHING! It was like Super Nintendo Street Fighter all over again. And to my surprise, I somehow managed to double my order quantity upon checkout! Go figure. My first thought, “!%&@!!!!!” I took a leisurely two minutes to compose myself and then proceeded to find the customer service number to cancel my order. At least that was my intent. Cancel. I didn’t appreciate being corralled into purchasing more than I wanted to purchase… those sneaky little… When I called the number, a lady with a thick accent responded, “Customer Service, my name is… ” and I couldn’t hear the rest. All I could hear was that she was Indian! My first thought, “!%&@!!!!!” This meant that I’d have to take an hour or so out of my day sorting through something that was ultimately my mistake, but still a HUGE inconvenience.

But hear me out, I’m not done yet! SHE WAS AMAZING! That phone call, and I quote from my phone’s timer, took a total of 5.03 minutes, including a confirmation email of my refund. I immediately said, “I need to cancel my order.” She was straight to the point, didn’t waste my time asking questions about if I would like this offer or that offer or whether I was interested in getting credit instead of a refund. No, her response, “I can do that. Would you like an email confirmation?” WHOA! I flipped a 180! I hesitated, but backtracked a bit and told her, “Well… I just want to cancel the extra 500 cards. I’d like to keep the first 500. Your website was really confusing” Her response, “I apologize about the email confusion. You will have a refund of… blah blah… would you like an email confirmation? I will stay on the line until you receive it.” And then I checked my email, she stayed on the line, my refund was cleared and that was that. Outsourcing customer service to India… that was the best customer service I’ve ever received!!

Although it’s not a new discussion topic, I found a couple Wall Street Journal Articles that discuss how our new President is affecting outsourcing to India:

India’s Outsourcing Industry Is Hesitant to Embrace Obama

Indian Outsourcing Firms Lay the Groundwork to Hire More Americans

Submitted by: Morgan O’Hara

At the last Speaker Series Dr. Fisher talked about the housing bubble, and whether that term is even appropriate for what we’re experiencing. I’m sure he’d cringe at my understanding of bubbles – a runaway from equilibrium prices. To me, it seems like we’re standing on the cusp of two quasi-bubbles: the explosion in consumer debt and the fictitious Wall Street boom. It feels like an earthquake has struck, the ground is shaking, and you have no idea how bad it’s going to get.

To better understand a bubble, here’s a fascinating article on the Pu’er Tea bubble which hit China’s Yunnan province. Please check out the audio slide show, too. The photos are spectacular. And just think, we’re going to be in China in four months!

CLICK HERE

My question: how does the collapse of the Pu’er tea market relate to what’s happening across the globe? The tea traders in Yunan ‘behaved like idiots,’ and manipulative buyers drove prices up. Who has taken on these roles in the U.S.? I ask because I don’t know. Can we consider our big banks as the manipulative buyers? Investors as the idiots? I don’t think the comparisons stick – help me out.

And who’s looking forward to drinking some Pu’er? I might try to bring some home – purely as an investment.

When we travel to China or India, two things are likely to happen. You will be legitimately and understandably shocked by the pollution in China and the poverty in India.

Re China: the blogosphere is full of heated debate re: what China and her development means for the environment and the rest of us.

On the one hand, if China follows the western pattern of energy consumption and lifestyle (as it lectures China on its bad development habits and how polluted it is), many feel that we are all pretty much screwed.

On the other hand, respected commentators like James Kynge are more optimistic. In his well received book, China Shakes the World: A Titan’s Rise and Troubled Future, Kynge points out that the earth simply cannot support 1.3 billion Chinese living like Americans so the Chinese and others will have no choice but to adopt different and better technologies, ways of living and consuming energy, and they will need to do so quickly, etc. The CCP leaders are not dummies and they know that stability in the country is key to their own survival so it will be in their political best interest to not adopt the western model of energy consumption as their wealth grows, simply because they likely can’t keep up with such demand and/or they can’t afford to pay for such a crazed energy shopping spree.

This Wall Street Journal article, Technology Levels Playing Field in Race to Market Electric Car, made me think of Kynge’s “the glass is more full than empty” view of how this may play out. Per this article, China is leading the field on this one.

Other examples of China leading, not following in this area:

– I recently met an entrepreneur couple in the Santa Barbara area who developed a new technology and system that would help load cars onto a moving train. The thought being that said system can help get cars off the road, give people more of an incentive to take the train, etc. They depressingly noted to me that nobody at the US Transportation Agency, Cal Trans, or in private industry had any interest in said system because (paraphrased) “things are as they are and there is no hope for any such technology to take off in the US as other ways of doing things and special interest groups are too entrenched.” Yet, the Chinese were willing to talk to them and the were close to entering a deal with a local or provincial Chinese government to test and develop said technology and system in China, where many of the rules have yet to be made and determined in this regard.

–Another example is that did you know that new cars sold in China must satisfy more stringent fuel exhaust standards than those sold in the US (or so a local auto dealer recently told me)?

So while these examples are a start, the reality is we need more of them and China still has a long way to go in this regard. I, with others, am hoping for the best but also bracing for the worst.

It will be up to the current generation, and our grad students in particular with their business training and expertise, to help or hinder how China and India develop in this regard. Clearly, on this issue, the environment and new technologies to minimize energy consumption, cooperation will be in everyone’s best interest. And think about how places like India and China can be testing grounds for new green and sustainable technologies that simply don’t have a chance to get off the ground here given our existing bad consumption and spending habits and existing rent seeking industries, government agencies and special interests groups seeking to maintain the status quo (see above WSJ article for Example A in this regard).

Prepared and Submitted by Morgan O’Hara:

Can you see it? Us in Mumbai, a beautiful summer’s day, playing cricket with a group of Indian MBAs, drinking chai, talking life, making those important connections. That’s business for you, Cal Poly international style. And not only is it going to happen in a few months, but we are going to be prepared.

On the morning of Feb 28th, we have a cricket ‘friendly’ with the Indian Student Association at Isley Park located on Tank Farm Road in SLO (let me know if you need directions). Start time is ten sharp (10:00 am), and we’ll end early afternoon, around one o’clock (1:00 pm), after burgers have been served. Though my authority is uncertain, I’m requiring attendance. Even so, RSVP by shooting me an email at mdohara AT calpoly DOT edu. We need to know how much eats to order.

On the evening of the 27th starting at 8:00 pm sharp, ten to twelve of us will have the privilege to crowd into Dr. Carr’s living room after that week’s hob nob ends at his house, and watch an Indian movie (Lagaan — and Oscar nominated cricket themed Bollywood production) on cricket’s nascence. (He notes 10-12 people is about all his living room can comfortably hold and he will supply the pillows, popcorn and sodas to said first come first served 10-12 people). I’ve been told that this movie serves as a good intro to the sport, and there will be someone knowledgeable on hand to answer any questions we may have.

For everyone, especially those who can’t make it on the evening of the 27th at Dr. Carr’s house, here are some quick youtube videos which go over some cricket basics.

Basics Video: CLICK HERE

How to Bat: CLICK HERE

How to Bowl: CLICK HERE

How to Field: CLICK HERE

India Team Highlights: CLICK HERE

Three important things you need to know, copied straight from Wikipedia:

Test cricket is played between two teams of eleven players over a period of up to a maximum of five days - although matches are sometimes completed early when one side wins well within the time allotted (i.e. in three or four days). On each day there are usually three two-hour sessions with a forty minute break for “lunch” and a twenty minute break for “tea.”

One Day International (ODI) is a form of cricket, in which 50 overs are played per side between two national cricket teams. The Cricket World Cup is played in this format. One Day International matches are also called “Limited Overs Internationals (LOI)”, because they are limited overs cricket matches between national sides, and if the weather interferes they are not always completed in one day. Important one-day matches, international and domestic, often have two days set aside, the second day being a “reserve” day to allow more chance of the game being completed if a result is not possible on the first day (for instance if play is prevented or interrupted by rain).

Twenty20 is a form of cricket, originally introduced in the United Kingdom for professional inter-county competition by the England and Wales Cricket Board (ECB), in 2003. A Twenty20 game involves two teams, each have a single innings, batting for a maximum of 20 overs. The game is completed in about two and half hours, with each inning lasting around 75 minutes, thus bringing the game closer to the timespan of other popular team sports such as football. It was introduced to create a lively form of the game which would be attractive to spectators at the ground and viewers on television and as such it has been very successful. The ECB did not intend that Twenty20 would replace other forms of cricket and these have continued alongside it.

See you all on February 28th at 10 am. If any questions, please contact me. As for the sparkly white uniform, we’ll have no dress code, but keep in mind, in India we’ll be sporting pants. Also, this is important, playing is NOT mandatory. You can come by, soak in the sun, enjoy the camaraderie, laugh at us fumbling all over the place, and get first dibs on the food.

Submitted by: James McMillan

Professor Carr Addendum and Intro to James’ Post: This is a post I asked James to make as a follow up to his earlier post, It’s Called Days Inn in China But It’s Nothing Like It, and For Good Reason (see also the comment thread). (Thank you James, for doing so and for taking the time.) As the below shows, we have found that finding a hotel in India that can accommodate a group of our size is a challenge. Rates are very high, which in turns impacts the price you pay for the trip. Moreover, the current hotel market there tends to be very high end (we can’t afford) or very low end (you will not want to stay there), with not much in between to choose from (our challenge to find and compete to get). Step back and think of this — a country of 1.3 billion plus people, with a hotel room supply of roughly only 105,000. My memory is that China has roughly 1.1 million hotel rooms in the country (see below for James’ US figures — roughly 4.4 million; we are a developed economy with money for fun and travel, while China and India are developing economies and emerging markets with much less money). Please be aware of this planning and business issue and constraint, and, business opportunity, as James touches on below. By the way, there are some very good and understandable macro reasons for this hotel market and supply condition in India and my memory is that your Khana book, Billions of Entrepreneurs, also has a nice chapter (Chapter 4 as I remember — “Fiat and Fairness”) re: how and why real estate development projects can be a challenge to launch, complete and make any money on in India. Be sure to read and think of this post and business environment issue as you read that chapter and as we travel in India and China. Also keep in mind that one (not the only) reason China has more rooms is that it has boatloads of peasants looking for work from rural villages who will work for cheap (in comparison to US wages, that is). The CCP in China is also operating more from a “build and they will come” mindset on the hotel issue. One model is not better than the other, they are just both different.

James’ Post:

>Did you know there are only about 105,000 hotel rooms in all of India while the US has about 4.4 million? If that’s not shocking enough consider that New York alone has about 110,000 rooms and Shanghai has about 135,000. Is it any shock to you that the prices for basic rooms in India are through the roof? With India having almost 4 times our population, why do you think such a disparity exists and why are the business men in India not capitalizing on such obvious demand?

According to some hotel executives, the blame can be placed on the government for not revising decades-old laws that limit the amount of land for sale which obviously drives up the prices. The Indian Railways has vast land holdings that could easily be converted into track-side hotels but at the moment they are just not willing to give these up. According to the Taj group of hotels, a chain with 7,000 rooms in India, the price of purchasing land at an auction is often just too high to make building a hotel financially viable.

For comparison purposes, a similar quality room in Delhi cost on average $187 versus $122 in Beijing. With India already struggling with infrastructure problems it?s no wonder that hotel room shortages and high prices are at the root of India?s lagging tourism industry. In 2005, New York attracted 6.8 million foreign tourists while India only had 3.9 million. This resulted in $22.8 billion for New York and only $6.7 billion for India. To put these numbers in perspective that translates into about $2,850 per New York resident as compared to $6 per India resident.

Fortunately, there seems to be some progress for the hotel business in India but they definitely have their work cut out for them. It is expected that there will be about $6.5 billion invested in hotel building which will allow for approximately 140,000 new hotel rooms to be built by 2010. Some of the hotels expanding into India are some of the worlds best know names (Hilton, Wyndam, Pan Pacific, etc.) that are all recognizing the huge potential.

So before these big corporate hotel companies come in and dominate the market, who?s down to take on the Indian government and start building some hotel chains? It sounds like if the political front could be worked properly, sky’s the limit!

The China Law Blog recently did a nice post that highlights some of the differences between China and the US re: holding upper management responsible for their blunders.

Click HERE to check it out.

One thing I have noticed over the years about the US and its citizenry — people moan and groan about the excesses of corporate America, but when it comes time for the rubber to meet the road and put those dudes in the clink for their excesses and misdeeds we have a reflex to back off in many cases under the argument that “we are special; we don’t do that here because we are this great democracy with this wonderful constitution that provides due process to everyone” and/or “said cases require the DA to prove reasonable doubt and criminal intent and that bar is just too high”.

Clearly, and as this CLB post shows, China did not mess around with such issues and subtleties on the highlighted case at hand. And in some recent cases, China has even executed such high-ups (e.g., one corporate exec in China recently received the death penalty, a year or two ago China executed the HEAD of its version of or FDA for corruption - does that happen to anyone in Washington DC or Sacramento for dereliction of duty?). As one Chinese parent noted (I am paraphrasing) of a women CEO/upper manager who was sentenced to life in prison for her role in a recent milk scandal in China where some kids died, “My baby daughter died because of what this woman did so this woman should have to die as well.”

On the other hand, to suggest that China always chases the bad guy corporate suits would not be true. I suspect that even in China, a number of the bad guy corporate suits also get away with it and/or are not chased due to lack of enforcement, particuarly when they are also CCP officials.

And of course, there are important nuances in what I say above, with respect to both China and the US. I acknowledge that. Fact, nuances, differences in cases and in the law are important and they matter.  No doubt that each case is different.

That said, your thoughts, future corporate suits of America (formal or business casual)? Which model should we adopt, and why? Throw the corporate bums in jail (more criminal liability as in this Chinese example, and is some cases execution) or more of the same (see you in civil court where you will be chased for big time $$ damages like in the US)?

Be careful what you wish for …. one day, and with a bad decision or two under your belt, you could be one of the very folks this post tosses some stones at.

Here is a must read article that recently appeared in the Financial Times [free subscription/sign up may be required; this is an excellent and important business and global newspaper to become familiar with] by an operations professor at the UNC Kenan-Flagler Business School re: how companies should think about leveraging operations in China and India during the downturn.

See also my prior related post on this topic, Leveraging China AND India.

What are your take aways?

This is a post I had written a while back but kept in the que. It relates to the nice Opportunity Arises-Go Mom! post Raquel made below a few days ago (be sure to give it a read) so I now let this one fly.  Even the college educated in China are feeling the pinch in this downturn. Click HERE and HERE to learn more from these NY Times and Wall Street Journal articles.

Several weeks again I was also listening to NPR and the segment noted how Chinese universities will start to admit fewer students because the CCP is concerned that if/when too many students graduate without jobs, they will then start to have a big stability problem.

As an aside, check out this recent related Wall Street Journal article on how to get a leg up in the interview process, A Question To Make A Monkey Out Of You.

Your thoughts?

Submitted by: Raquel Rusing

About two weeks ago, I took the initiative to do something for myself: complain to my mother about my personal trials and tribulations associated with the economic crisis at hand. For example, “No one wants to hire an MBA… they only want engineers! Why was I a pure mathematician?? I should have done applied math! And now I’m too expensive! I’ll never get a job after school and I’ll starve to death three days after returning from Chindia because my bank account will have negative cash flows.” I got so angry with my mother’s optimism because she was ruining my poor fortune, at a time when I needed to vent, that we hung up on one another. Later, I received a text (yes, she’s that saavy). It read: Tweeter, in the Chinese language, chaos and opportunity are the same word because opportunity arises from chaos. You have such a bright future ahead of you! We are so proud of you, take care of yourself. Love YOUR mom.

Aside from the fact that my mother has always been the steadfast backbone of my chaotic lifestyle, I doubt she realized the true weight of her words. And to be honest, I didn’t realize them either until today… thanks to good ol’ Morgan O’Hara. Morgan cracked a joke about how I must have a new fascination with China because of the jade Buddha dangling from my neck. Although I chuckled, I responded quickly to justify its purpose: I have owned the necklace for several years and although I am not a Buddhist, it serves as my tangible reminder to remain balanced. Then, my mother’s text clicked. See, I dedicate myself to a disciplined order of things in hopes of finding balance between my thirst for spontaneity and my naturally linear thought patterns. I have always viewed the constant chaos as a flaw and struggle to repress it. But leave it to my mother to make me feel better because in her own subtle and amazing way, she once again reminded me that we can leverage personal weaknesses to develop ourselves both intellectually and emotionally.

This got me thinking about how I handle chaos. I learned a fairly well-known mantra from a good friend of mine years ago and often recite it when I feel lost. I still strive to truly understand its meaning, but the mantra is for prajna, or Transcendent Wisdom, which occupies a paramount position in Buddhist teachings. One is taught to balance compassion with prajna, such as emotions with logic.

“Tayata gate gate paragate parasamgate bodhi soha.”
Translation: “Gone, gone, gone beyond. Gone completely beyond. Awakened. So be it.”

For me, the mantra reminds me that the only limitations in my life will be my mind. It reminds me to never stop searching or growing. I believe it inspires compassion, transforms confusion into clarity and suffering into joy. And I think this is where the concept of chaos and opportunity come into play. Although there is conflict surrounding the idea that chaos and opportunity are linked in the Chinese language, I believe the concept still exists. Like right now! A chaotic economic spiral is the perfect opportunity to Carpe Diem! A Wall Street Journal Article published in October of 2008 explains how such a phenomenon exists in the business world, “…Economic downturns create more opportunities for companies to move from the middle of the pack into leadership positions than any other time in business. Unlike [non-chaotic times], where leaders can thrive on raw power alone, [chaos] requires strategic finesse. That often results in dramatic differences in performance.”

Well, we’re in a spiral of chaos now.. a tornado of change… a moment of opportunity? Your thoughts?

By the by, I called to tell my mother I loved her and to thank you for her words, since they really helped me put things into a new perspective. Her response was, “Thank goodness I read the Wall Street Journal.” HA. Go Mom!

This post has been on my to-do list for two weeks, but work flow kept pulling me away and in any event other and much better bloggers and commentators than me beat me to it and I have nothing new to add. Check out the below, and in particular the comment threads. These current event topics are important for you to monitor and come up to speed on before we arrive in China.

China Law Blog Posts:

• Obama and Geithner on China: Election Hangover or the Way It Will Be?

• Breaking News: Obama Called Hu and Threw Geithner Under The China Bus

Silicon Hutong Posts:

• Five Reasons Obama Will Go Slow on China

• @rmack Agrees: Obama’s Outreach to China Should Be Social

Two Recent Wall Street Journal Articles:

• Chinese Premier Blames Recession on US Actions

• China’s Migrants See Jobless Ranks Soar

What do you see or read above that relates to you and how/why?