NMHU 1ST Annual Hispanic Business Forum

Dr. Luis Ortiz Executive DirectorEconomic Development CenterInternational Business and Management

April 1, 2005

Presentation Agenda

• What does mean to be an HSI?– A brief look at history

• International Business (Globalization)– Need for change

• Economic Development– Our EDC approach– Critical factors– Workforce

• Impact on Culture– What we know

• Where are we headed? – Exporting matters– Cross-cultural integration

• Questions, Questions and Answers

History Timeline

• Pre1590 (Pecos & Taos Pueblo)– Native American Pueblo (Pecos, Taos and Tecolote),

Apache, Comanche, All Plain tribe came through here– Comancheros – Early Spanish traders - Ciboleros –

Buffalo hunters (Spanish Mora – Lubbock)

• 1592 Coronado – expedition across the Gallinas River

• 1680 -1700’s– San Miguel del Vado

– 1st village established Northeast of Santa Fe– French/Spanish trading

• 1821-a watershed year– Mexico wins independence from Spain– Land Grant applied for by C de Baca

– To Spain, yet granted by Monterrey, Mexico– Evolution of the Santa Fe Trail (1821-1890)

– Trade flourished: $15,000; by 1860, $3.5 million, (or more than $53 million in today’s dollars)

• 1835 (Spain to Monterrey, MX)– Nuestra Senora de Dolores de Las Vegas Grandes

(during Mexican Territorial Period)

• 1836 (remember the Alamo)– Texas Wins independence from Mexico

• 1846 War Begins– Mexican-American War

• 1848 US Southwest Expansion– Americans Claimed NM, AZ, CO, UT, CA, NV, and TX – Treaty of Guadalupe Hidalgo– General Stephen Watts Kearney

• Announced US Territory (form the roof of the Dice Apartments - northeast of the plaza)

• 1879 Railroad in Las Vegas– Land is purchased on the East side since the West

land values is high and Hispanic owned– Railroad increased American Influence

• Jesse James• Billy the Kid• Doc Holiday• Pat Garrett• Vicente Silva’s Gang

• 1882 two towns are formed– East (Victorians homes) – West Las Vegas (Adobes homes)

• 1893 NMHU Established• 1970 Consolidated City

– (Fire, Police, Gov’t)

West and East cultures met here, Santa Fe Trail, Over 900 structures on National Historic Registry, 1 of 12 distinct destinations, Culture and charm without the tourist prices

What does it mean to be an HSI?

• Strategic Plan– Includes Economic Development

• Stakeholders– Students– Community– Faculty/Staff

• Process and Management– Pressure for change– Government– Business– Hybrid Model

International Business (Globalization)

• The Political and Economic Environment• The Legal Environment• The Technological Environment

Workforce Diversity

• The Need for Change

• The world labor force is undergoing considerable change as a result of:– (1) the increasing movement across borders of workers at all

skill levels;– (2) the rising average age of employees; and– (3) the addition of great numbers of women to the workforce

(particularly in developing countries), many with higher levels of education. (Deresky, 2003)

Perception always changes Reality is always the same

International Business Environment

Functionsand PeopleLOCAL OPERATINGENVIRONMENT

RegulationsCulture

SkillsSoc. Responsibility

Ethics

MEGAENVIRONMENT

HOST-COUNTRYENVIRONMENT

Cultu

re

Local Com

petitio

n

EconomicPolitical

Technological

Subsidiary-HostInterdependence

MNC-Host-CountryInterdependence

Global

CompetitionGlobal

Trends

and Forc

es

Levels of Economic Integration

Political Union

Economic Union

Common Union

Economic Union

Free Trade Area

X EU1992

X NAFTA1994

A Focus Approach to INTB

• Northeastern New Mexico

Las Vegas San Miguel Economic Development

“A public/private partnership – that works”

“The Public Private Partnership”

• EDC is a private non-profit company chartered for economic development.

• The City, County, private businesses and Educational Institutions contribute to resources to EDC.

• Our Vision– Jobs for our children and citizens.– Smart planned growth for our area.– EDC include all stakeholders in the decision-making.– Leverage our cultural identity.

Why were we created?

• Increase our economic viability.• Use the engaged educational institutions

– a significant asset – play an important role in economic development

• Breakdown false, old and dated perceptions• Facilitate businesses to become suppliers and export• Use EDC resources to support business

development (incentives)• Join together for enhanced impact

Our Economic Development Approach

• Improve and expand “existing” businesses.– Customer Service– Red Team– 80% for our efforts and growth

• Manufacturing• Agriculture• Tourism• Service• Retail (MainStreet)

• Encourage new “home grown” businesses.– Small Business Development Center– Educational Biz Plan Software

• Attract new “targeted” businesses to our area. – NM Partnership– Other Professional Firms and Internal Leads

On-going University/Private Research

• Investigate the local businesses and identify business gaps and local workforce (development)

• Business Development – What are the existing strengths?– What additional resources are needed to meet the

requirements?– Provide technical assistance, business capabilities list and

organizational support.

Retain & Improve Existing Businesses

• Customer Service & Training– Customer service training programs for our companies

• Red Team– 11 local professionals

• Comprehensive Marketing Strategy– market the community and businesses to potential customers

• Bring Expertise and development strong relationships with other entities.

– bring in LANL, SNL, grantors, state agencies and industry associations to our business community

We Nurture Home Grown Business

• Business Incubator– We have established the operation of a business center on campus for start-ups

• Organizational Development– includes the development of marketing and promotion, business plan and red team

assistance

• Mentoring Organization– A mentoring program similar to the approach of SCORE our “Red Team”.

• LCC Curriculum Development– We are working with SBDC on curriculum that strengthens our workforce and

includes “how to start a small business”

Targeted New Businesses

• Internet Site – EDC had developed a comprehensive EDC website with a

complete community inventory www.lvsmedc.org• Targeted Employer List

– Develop a proactive business recruitment program.– Identify and develop additional real estate to support economic

development.• Attract employers that fit our resources and needs

– Service, Technology, Manufacturing (wood, cultural significant indigenous products)

What Assets do we offer?

• Contractors• Services• Certified professional

providers• Products• Industrial park• Educational institutions• Wood cluster industrial

group

• 90 EDC members• 300 Chamber of

Commerce members• 1,700 business are

located in Las Vegas and San Miguel County

• Land• Buildings• Bilingual workforce• Educated workforce

What has EDC Delivered to our Business Community?

• Yearly strategic plan with time line and action items • Researched the community assets• Updated city and county statistics and resources• Put in place a red team for businesses• The EDC website www.lvsmedc.org• Integrated economic development plan with the our

existing educational institutions• A small business incubator• Unified approach to economic development• Grants for local businesses• A professional organization in our rural community (urban)

What matters to business?

Existing, New or Relocation

• A. Project Critical• B. Indicators of a Successful Operation• C. Relationship Factors

Thirteen Critical Factors (Jim Colson, CEO)

• A. Project Critical (must have)– Real Estate (Land)

• existing building, size, cost, raw land, transaction• possible redesign

– Labor Force (Workforce)• population• skill set, training, education, projections (down, flat, growth)• transfers• wages/benefits• employment/unemployment• underemployment

• B. Indicators of a Successful Operation– Operation Cost

• lease terms, occupancy, wage rates, insurance, workers compensation, comparison, etc…

– Access to Market• places & things, customers, data, knowledge, ease of

access, energy– Transportation Networks

• highways, airport, rail, cargo– Supplier Vendor Network

• region, local suppliers, technology, just-in-time– Utility Infrastructure

• water, electric, sewer, fees impact/development, timing of service development

Thirteen Critical Factors (Jim Colson, CEO)

– Business Appetite• welcome, access to government officials, length of process, anticipated

requirements, zoning, permitting process– Educational Climate

• quality of education, relation with the business community, ranking/scores, access to students, customized training

– Community Characteristics• size, history, culture, housing, quality of life, cost of living

– Tax Environment• State taxes, county, local (property, sales, indirect)

– Financing Infrastructure • Availability of financing tools (1% prime +2), cost of money, terms,

access to lines of credit– Incentives

• Offsets cost of expansion, relocation, start-up (feel wanted), taxes, training, loans

Thirteen Critical Factors (Jim Colson, CEO)

•C. Relationship Factors

NMEDD State Incentives (Fabian Trujillo)

• JTIP– Job Training Incentive Program

• High Wage Jobs Tax Credit– 50% of sales outside of NM (export)

• Rural Jobs Tax Credit– Job creation in rural NM– Outsource to rural America

• Community Development Act– Resolution exempting taxes

• Local Economic Development Act– 5% of general fund and/or 1/8 of one percent GRT

Local Incentives (ED Ordinance)

• Economic Development Ordinance– City Owned Utilities (Gas, Water, Solid Waste)– Rent/lease deferment for city property– Training Programs - NMHU, LCC, Tech Conex

• Customized programs– Property tax deferment – Performance based incentives (jobs)

Northeastern New Mexico2003 2003 Per Capita

1970 2000 2003 Change Labor Force Unemployed Rate IncomeSan Miguel 21,951 30,126 29,670 7,719 14,067 859 6.1% 19,851.00$ Mora 4,673 5,216 543 2,056 310 15.1% 15,028.00$ Taos 17,516 29,979 31,269 13,753 14,388 1,371 9.5% 20,912.00$ Colfax 12,170 14,189 14,051 1,881 6,556 346 5.3% 21,961.00$ Union 4,925 3,814 -1111 2,071 47 2.3% 24,751.00$ Harding 1,348 747 -601 474 19 4.0% 17,107.00$ Quay 10,903 9,605 -1298 3,981 163 4.1% 19,314.00$ Guadalupe 4,969 4,574 -395 1,703 109 6.4% 14,415.00$ Total/Avg. 78,455 98,946 20,491 45,296 3,224 6.6% 19,167.38$

USA 290 million 147 million 7.6 million 5.1% 31,632.00$ New Mexico 1.9 million 915,112 45,300 5.0% 25,541.00$

2030 Population Projections

San Miguel 39,000Mora 7,500Taos 40,000Colfax 16,000

2030 Population Projections

Union Harding 700Quay 9,000Guadalupe 6,000 (unm)

Las Vegas Workforce

• Underemployment – 600-700 local employees

• Unemployment rate 6-7% – 950 average claims

• Estimated 3,000 employees – commute 45 minutes or more on a daily basis out of Las Vegas

mostly to Santa Fe• Students - NMHU 2,300 (DE 1,000) & LCC 1,850• 75-85% of local population is Hispanic

Impact on Culture

• Culturally savvy is a working knowledge of the cultural variables affecting management decisions.

• Cultural sensitivity or cultural empathy is an awareness and an honest caring about another individual’s culture (genuine or fake)

What is Culture?

• The culture of a society comprises the shared values, understandings, assumptions, and goals that are learned from earlier generations, imposed by present members of a society, and passed on to succeeding generations.

• “…is the system of shared beliefs, ideas, values, knowledge, behaviors, and norms. This shared system serves as behavioral guidelines for accomplishing tasks, solving problems, and relating to others.”

• The way things get done.

30

Cultural Variables(Identified by Harris and Moran)

• Kinship: A kinship system is the system adopted by a given society to guide family relationships.

• Education: The formal or informal education of workers in a foreign firm, received from whatever source, greatly affects the expectations placed on those workers in the workplace.

• Economy: Whatever the economic system, the means of production and distribution (and the resulting effects on individuals and groups) has a powerful influence on such organizational processes as sourcing, distribution, incentives, and repatriation of capital.

• Politics: The system of government in a society, whether democratic, Communist, or dictatorial, imposes varying constraints on an organization and its freedom to do business.

• Religion: The spiritual beliefs of a society are often so powerful that they transcend other cultural aspects.

• Associations: many and various types of associations arise out of the formal and informal groups that make up a society.

• Health: The system of health care in a country affects employee productivity, expectations, and attitudes toward physical fitness and its role in the workplace.

• Recreation: Closely related with other cultural factors, recreation includes the way in which people use their leisure time, as well as their attitudes toward leisure and their choice of whom to socialize with.

Project GLOBE Cultural Dimensions

• Assertiveness: refers to how much people in a society are expected to be tough, confrontational and competitive versus modest and tender.

• Future Orientation: refers to the level of importance a society attaches to future-oriented behaviors such as planning and investing in the future.

• Performance Orientation: measures how important performance improvement and excellence is in a society.

• Humane Orientation: refers to the extent to which a society encourages and rewards people for being fair, altruistic, generous, caring, and kind.

GLOBE Research ProjectSelected Findings

Factor Least Medium Most

Assertiveness Sweden Egypt Spain

PerformanceOrientation Russia Sweden USA

FutureOrientation Russia Slovenia Denmark

Humane Orientation Germany (West) Hong Kong Indonesia

(Example of countries for each factor)

Hofstede’s Value Dimensions

• Power distance is the level of acceptance by a society of the unequal distribution of power in institutions.

• Uncertainty avoidance refers to the extent to which people in a society feel threatened by ambiguous situations.

• Individualism refers to the tendency of people to look after themselves and their immediate family only and neglect the needsof society.

• Masculinity refers to the degree of traditionally “masculine” values that prevail in a society.

What is Culture to you?

Race

Profession

Education

Level Markets

Organizational Structure

Services

Position Function

Generation

IncomeFamily-Status

GeographyHealth

Personality

Talent

Experience/Tenure

Habits

Religion

Skills

Gender

AgeHobbies

Ability

Interests

Values

AbilityEthnicity

Aptitude

Organizational

Situational

Experience

Personal

Core

Adler’s conceptualization

Source: Nancy Adler “International dimensions of organizational behavior”Southwestern 1997

Management and Maintenance StrategiesManagement and Maintenance Strategies

Operationalization of Culture

OrganizationalSituationalExperiencePersonal

Core

products, services, structure functions

income, geography, family status

skills, education

values, religion, personality

age, race, gender

Easiest to Change

Not Changeable

Source: Pace Group Dallas / Ortiz “Cross-and intra-cultural interpersonal work relations: Maquiladora managerial professionals provide their perspectives ” AMA 2000

Visible

Invisible

*** Working below this level will only discourage the manager and leads to law suits

Cross-cultural differences innon-verbal behavior

0

1

2

3

4

5

6

Silent Periods Facial Gazing Touching

AsiansAmericansLatin Americans

Source: Graham “The influence of culture on negotiations” JIBS 1985

Cross-cultural differences inconversational behavior

0

5

10

15

20

25

30

Conv. Overlap

AsiansUSALA

• Conversation overlaps

Source: Graham “The influence of culture on negotiations” JIBS 1985

Cross-cultural differences inconversational style

Styles of Verbal Communication

Asian Person A ______ ______ _______Person B ______ ______

Anglo Person A ___ ___ ___ ___ ___ ___Person B ___ ___ ___ ___ ___

Latin Person A ____ _______ ______________ __Person B _____ ________ ___ _________

Source: Graham “The influence of culture on negotiations” JIBS 1985

Where are we headed?

Values

Attitudes

Behaviors

Culture

Ready or not!

• Exporting Matters! (export products)– Services– Timber (forest management)– Local products– Unique and different

• Global migration (import talent)– Older workforce– Multi-lingual society– Relationship building – Working with other cultures

Three basic classifications of Employees1) Extra-Role Behavior Employees (OCB)2) Contractual Agreement Employees3) Sub-Optimal Employees

Organizational Behavior Research

Working with other cultures

OCB

Organizational Justice

Job SatisfactionJob Performance

Trust/commitment

Theoretical Model of Employee Theoretical Model of Employee Work BehaviorWork Behavior

Source:Bateman & Organ, 1983; Konovsky & Pugh, 1994; Moorman, 1991; Organ, 1988

Distribution of rewardsProcedure of the organizationInteraction with co-workers & managers

PayCo-worker/managersJob itselfPolicy/advancement

EntitledEquity sensitiveBenevolent

Never fear Change?

It has always lead to innovation!