Emerging markets are enticing more MBAs whose expertise can make a dramatic difference in far-flung regions of the world. Kellogg is marshaling a variety of resources to give students the skills needed to succeed in this international business adventure.

By Daniel Cattau

When Leslie Flagg graduated from the Kellogg School of Management 12 years ago, the concept of emerging markets had not yet truly emerged; the most adventurous Kellogg students headed off to Russia for two weeks of field research in the school’s fledgling Global Initiatives in Management (GIM) program.

“The whole idea of working abroad — whether for corporate America or international development — was novel, or really crazy, because the U.S. market was great. Everyone received two to five [job] offers, consulting was hot and Procter and Gamble was heaven,” she says.

But Flagg, now deputy team leader and agribusiness specialist with Chemonics International in Abuja, Nigeria, was determined to do something different and make a difference. Her aunt refers to her as a “capitalist with a cause.”

After Kellogg, Flagg was awarded a Tuskegee University fellowship to work in Africa for nine months and ended up staying 12 years — and counting. She started in Ghana working for a US AID-funded project that, quite literally, went nuts under her direction.

“The way I look at it, if you can make a difference, a sustainable difference, in a foreign country, you’ve done a lot,” Flagg says. “For example, we identified cashew as a growing opportunity for poverty alleviation and profit while in Ghana. After 10 years, farmers and private sector players are still making money in Ghanaian cashew.”

When asked about the difficulties of living in Africa, the 1991 Kellogg alum says: “Challenges are relative. Some would say that living and working in Nigeria is a challenge, but I feel being unemployed in the United States in this current environment is more of a challenge.”

International flair
Kellogg is an international community, with an alumni network spanning the globe and a diverse faculty and student body bringing a rich multicultural perspective to the study of business leadership. Increasingly, that community is expanding. Students are looking at international careers not only as a way of doing well, but also doing good.

International business is one of the most popular majors at the school, augmented by such research institutions as the Kellogg Center for International Business. The Kellogg School network includes an increasing number of alumni in emerging markets, including Turkey’s economic minister, Ali Babacan ’92; Thailand’s deputy prime minister, Somkid Jatusripitak ’84; and the governor of the Afghan Central Bank, Anwar Ahady ’83.

The GIM program, initiated in 1990, attracts about 240 full-time students each year to the course which culminates in two weeks of intensive field research in one of a dozen countries, ranging from China and Vietnam, to Chile and Peru. Coordinated by faculty advisers and Kellogg students, these courses include 10 weeks of classroom preparation for the in-country research trip, which involves meeting top government officials and senior business leaders.

Faculty advisers Mark Finn and Anu Dayal-Gulati say that while many students focus on traditional business issues, there is a strong interest in corporate responsibility, such as how pharmaceutical companies address the HIV/AIDS crisis. As part of the GIM course, Kellogg students have studied such issues as possible remedies to the mother-to-child transmission of HIV in South Africa and AIDS prevention through marketing in Ghana.

“ Our students are interested in emerging markets almost by definition because they’re interested in new directions in business,” says GIM program director Finn, who is also associate professor of accounting and international business. “The students don’t necessarily want to study insoluble problems.”

Emerging markets are easy to spot — China, India, Vietnam, South Africa, Brazil and Chile to name a few — but more difficult to define. Generally, emerging markets have demonstrated consistently high growth rates, even exceeding that of developed countries. They also typically promise greater untapped economic opportunities (though any country theoretically demonstrates similar potential).

At Kellogg, interest in emerging market careers is increasing, despite such challenges as terrorist threats, the SARS outbreak in Asia, and a few problematic, if not plummeting, economies. Those who have fashioned international careers out of their Kellogg experiences believe the downturn in the U.S. economy might lead a new group of entrepreneurs and adventurers to careers overseas.

Special leadership to meet emerging demands
Mariann Kurtz Weber ’92 recently moved from Sarajevo, Bosnia, to Washington, D.C., with the International Finance Corp., the private sector arm of the World Bank (see Kellogg World, spring 2003). She is program manager of Linkages, which helps IFC spread the effects of its investments in larger companies to smaller businesses.

Kurtz has her share of Balkan war stories, and the advice she imparts to today’s students is geared toward survival. She suggests that MBAs must now take a more holistic approach to finding their dream job, especially given the current economic realities of the marketplace. Opportunities, including ones in emerging markets, are of course still available to those prepared to understand and accept the challenges.

But Kurtz Weber says, “One has to be cautious about the nature of the work you engage in. You have to be clear what are the potential trade-offs, hazards and available locales.”

For those interested in working in emerging markets, she adds, it’s important to know that being a specialist is not enough. Knowledge of public policy, capital markets and banking systems all help, she notes, as does a grounding in international crisis management.

That is one reason why crisis management is becoming increasingly prominent at the Kellogg School, notes Finn. Kellogg is placing more emphasis on the subject through a variety of initiatives that include enhancements to the curriculum, such as a new course that includes cross-cultural situations. In addition, Kellogg hosts a number of leadership speakers series and conferences, and CEO roundtables that bring senior executives to campus to share their insights with students.

“ We are continuously encouraging our students to ‘dig deeper’ to understand the complex demands of leadership today,” explains Kellogg School Dean Dipak C. Jain. “One area where we are now focusing greater attention is leadership challenges within the government sector — not only in the United States but around the world. This initiative is yet another way Kellogg is preparing its students to play senior roles in an array of professional settings.”

In interviews with students, it’s clear that altruism is rising along with an awareness of great overseas opportunities. Tapiwa Mashingaidze ’04, one of the founders of the year-old Kellogg Emerging Markets Club (KEMC), cites a Chicago-based investment banker who brokered a multi-million dollar securitization for the Africa Development Bank, and then went on to own a highly successful Senegalese insurance company.

“ There is a common misconception about careers in emerging markets,” he says. “The idea seems to be that an emerging markets career is an extension of the Peace Corps . . . and offers the satisfaction of doing good, but few of the other rewards to which we all aspire — like cash.”

Even the socially conscious Kellogg students sometimes believe a career in emerging markets precludes a materially comfortable life, Mashingaidze says. “It really is not all about the Peace Corps,” says Mashingaidze, a British-born Zimbabwean. “Emerging markets problems can be opportunities for both dreamers and bankers.”

Opportunities abound beyond investment banking and consulting. Manufacturing, public health, the environment and high technology are all arenas holding significant promise for MBAs looking to make a difference abroad. Nongovernmental organizations (NGOs) and such multilaterals as the World Bank and US AID provide other options.

“ One of the most important trends in the world economy is the internationalization of production,” says Sergio Rebelo, Kellogg School professor of international finance. World exports in 2001 amounted to $7.4 trillion, but production by multinational corporations outside of their country reached $18.5 trillion.

In the pharmaceutical industry, for instance, many companies find it more efficient to produce in different countries, Rebelo says. “This decentralization of production is very exciting because it can lower costs and increase the size of the market, raising the rewards to innovation.”

Some Kellogg students are working to bring even greater awareness of emerging-market opportunities and education. KEMC President Darren Makarem ’04 says career development is a key area of focus.

“ Partly in recognition of the increasingly stringent work visa regulations in the United States, “it is desirable to identify and foster relationships with companies and organizations operating in emerging markets who may be able to offer students nontraditional career paths,” he says.

In addition, Marcy Shugert ’04 — a KEMC leader who has studied HIV/AIDS education in South Africa, Thailand and Australia — is a proponent of expanding the Kellogg international course offerings and case studies to create even more career opportunities in emerging markets.

Robert A. Korajczyk, senior associate dean for academic affairs and the Harry G. Guthmann Distinguished Professor of Finance, says that Kellogg “has an array of initiatives designed to enhance students’ exposure to global issues in general, and emerging markets issues in particular.” These include GIM and several research centers that support faculty research on global issues, such as the Ford Motor Company Center for Global Citizenship.

In addition, Korajczyk says the finance department offers a course titled Major Project and Project Finance in Emerging Markets. More importantly, he notes that emerging market issues are being covered with greater frequency in courses not specifically listed as international classes.

“ Another important development,” Korajczyk says, “is the creation of a task force whose mission is to study all international issues faced by the school.”

Kellogg students, no doubt, will embrace these developments and reap the rewards of a curriculum that helps expand the global footprint of Kellogg and its alumni network.

“ The more Kellogg can introduce the global into education,” says Shugert, “the better prepared students will be in understanding differing viewpoints, backgrounds and beliefs outside of their own.”