Even wizards of global economics lack the
magic touch
American business leaders are not in Kansas anymore once
they start operating overseas, featured speakers agreed
at the Finance Roundtable panel discussion March
10 at Gleacher Center. Two GSB alumni outlined difficulties
their firms encountered in making the jump abroad, even
in seemingly similar cultures such as Europe.
Meredith Mendes, '91, executive vice president and worldwide
CFO for Edelman, the
largest privately held global public relations firm in
the world, drew on her own �battle scars� to outline obstacles
to standardizing operating procedures in different countries.
For example, in the United Kingdom, terminated employees
are offered �Garden Leave,� meaning they are required to
serve out their notice period away from the office while
still receiving their usual salary and benefits. �I've
had many times where you're trying to project the revenue
per head and you're trying to figure out how many people
you have,� Mendes said. �In London, where we have 150 people,
if five people are on the payroll but not being further
employed three weeks from now or three months now, you're
getting a totally different number than if those people
are actually not on the payroll.�
Matthew J. Hower, '90, treasurer of Amsted
Industries, a $2 billion diversified manufacturer on
six continents, outlined problems his company encountered
in banking in various countries in Europe. In the United
States, all companies are assigned bank accounts that disburse
and receive cash, investing surpluses and borrowing to
pay debts, Hower said. Amsted found the same structure
did not work across Europe, he said. �Money transfers in
Europe, believe it or not, require underlying economic
transactions of substance,� he said. �There are local regulations
that come into play. In Germany, they're very strict on
thin capitalization, so you have to be very careful with
inter-company loans, so that you don't forfeit some of
your interest expense deductions.�
