Fall 2014

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The “Global” Issue /PRESIDENT’S Letter/ There is one easily noticeable similarity between Fortune500 companies; each company serves more than one geographic region. In fact, I can go as far as saying that each Fortune500 Company has touched the soils of at least one country in every continent (except maybe Antarctica). We are living in a fast-paced, global economy and these Companies have taken note and are adapting-- or they are the disruptors causing this shift of globalization. Now, these are companies as a whole that we are talking about, they are the ones causing or adapting to these shifts but a crucial aspect to serve a global market is the workforce behind the product or service “coming soon to a location near you.” This workforce is globally integrated with headquarters in Japan, manufacturers in India, a marketing team in each geographic region, and retailers in every Smart Centre.

In brief, this global economy is a fragile situation where “the cancellation of a Christmas order in New York meant layoffs in China.”

As students—and the future workforce—we need to be ready for the global economy. By speaking to various industry professionals and on-campus resources, Atrium Media Group has compiled a guide to help you thrive in this ever-changing world of commerce. We hope you enjoy this issue as much as we enjoyed creating it. It has opened our eyes as we realize how truly important being aware of the world around us is from a humanity-perspective and from a business point-of-view.

Keep on exploring Golden Hawks, Mawadda Basir and Andriana Vinnitchok Co-Presidents

/EDITOR’S Desk/ The vision of this November issue is to inspire and provide insights on success, not unlike many of AMG’s other issues. However, the theme centralizes on the hot topic of globalization. The layout for the articles can be broken down into its three respective sections:

Becoming a Global Student revolves around providing information on the mannerisms of business etiquette around the world; the codes of business conduct. Then we delve in to further education by examining certain graduate programs in different parts of the world, to give you a basic overview of what opportunities are available. The section wraps up on how you can become involved on an international context through Laurier’s clubs and services, thus building your global resume.

Global Business Leaders and Professors is an examination of proven individuals who had success on the global landscape. These are the interview-based articles which are the typical style accustomed to AMG. These articles have an advisory and mentor-like tone, which convey messages and lessons learnt through international experience.

Global Business Issues shrinks down the broadening concepts and talks of how certain issues affect both individuals and businesses. There is the emerging topic in transfer pricing, and personal insight on the effects of globalization for a business owner. There is also a special discussion with the Dean on the new Global Innovation Exchange building included.

My hope is that by the end of this, whether you read parts of the magazine or read it as its whole, is to think big. Go beyond the walls of Wilfrid Laurier University and the Kitchener-Waterloo community to the villages, towns and cities across the seas. Understand the value of international experience and focus on opportunities outside your familiar realm.

‘A ship is safe in harbor, but that’s not what ships are for…’

Daniel Chen Editor-In-Chief 4/Atrium Magazine Fall 2014

Editorial: What is Globalization?

By Daniel Chen

“The integrated world is driven by ideas, inventors and investors – the pursuit and development of international trade, coupled with the industrial revolution marked, just the beginning in the effects of globalization.”

Globalization is the breaking down of political and physical barriers to enhance interactions with other individuals, communities and businesses across the world. The Economist has attributed the pivotal force, which bulldozes these barriers, to be the development of information technology and political policy. Policies such as the North American Free Trade Agreement (NAFTA) which lifted taxes on the products between Mexico, United States and Canada are but one example of the progress. Information has never been so accessible.

Consider the place of globalization in your daily lifestyle. Emails, text messages, phone calls, Skype, Facebook – how has this impacted your identity within the world? It is so engrossed and embedded in the daily business transaction, and in our lives, that it is often overlooked. In the midst of this bombardment of technological advances, we have assimilated and incorporated these developments to meet our changing needs. It then becomes important to step back and establish your own meaning for globalization and its effects on a microscopic level. In so doing this, you will be able to take a stance and measure the changes in the world through your own lens. As a result, you will have built a mental framework of globalization to recognize which of these vast numbers of developing ideas will leave an impact on the global market.

The integrated world is driven by ideas, inventors and investors – the pursuit and development of international trade, coupled with the industrial revolution marked, just the beginning in the effects of

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globalization. What followed was the second industrial revolution, a scientific-technical revolution and then the current digital revolution. The old methods of communication, that is face-to-face and personal interactions, then evolved into a widespread telecommunications grid. It is the ability to now wirelessly transmit live feeds, via radio signals, of ourselves and surroundings into video conferences and social media with our mobile phones. This welcomes another dimension of possibilities, as well as threats.

However, adopt both cautious and optimistic viewpoint about the substantial growth as it also means an increase in the vulnerability of a widespread information breach. International databases and networks which store information on domestic databases and networks can lead to a dominos effect. So be wary of what you reveal and see but also remember to engage in unfamiliar opportunities, as quite often they lead to great things.

But does that mean there should be a limit on globalization? The process is similar to the life cycle of a business; there are the start-up, growth, maturity and decline stages. At the end of the cycle, a decline can either trigger the rebirth or death of the entity. For the time being, the positive effects of globalization have kept away naysayers and unwanted friction. Thus, continue on. Acknowledge the pros and cons of the increasingly limitless world and strive to understand it as a whole, not its parts, because then you will become a true global leader. ////

By Pearl Leung

Canada

China

Columbia

France

Japan

Mexico

USA

The Japanese often slurp when eating noodles. Don’t be offended - it’s their way of showing appreciation for the meal.

Value rank very highly.

Always address someone by their title.

Two pronouns can be used when directly addressing a person. “Vous” should be used until one is given permission to use “tu”, which is much less formal.

Introduce themselves with their full names and a firm handshake.

Business cards are exchanged after the first meeting, and they begin operating on a first name basis.

Business lunches are often no shorter than 2 hours! It is important to show appreciation for French cuisine, which is a large part of their culture. Lunches are often used to build relationships rather than make deals.

Business meetings are often conducted over a meal.

Hosts should mirror his or her guest’s order, and pay for his or her guest.

Operate on last name basis.

Those in professional positions should always be addressed by their titles.

There is a clear difference between business meetings and social gatherings. Business deals are never made over a meal.

Only men propose toasts.

Operate on last name basis.

Those in professional positions should always be addressed by their titles.

Silverware is used to eat everything - even fruit!

Operate on last name basis addressing each other with honorifics, such as -san. Business cards are offered and accepted with both hands and a slight bow.

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Global Graduation Programs As undergraduate business and economics students, many of us will likely consider pursuing further education, whether in attaining a CPA designation or a master’s degree. The reality is that in order to gain increased recognition in the dynamic job market today; one must pursue education beyond a bachelor’s degree level.

By Evan Rodvang

An important decision is where we choose to pursue higher levels of education. There is no doubt that Canada has many highly regarded institutions that offer very prestigious MBA and Masters of Economics programs. These programs also frequently offer the flexibility of being able to pursue a full-time job alongside MBA coursework, allowing students to avoid sacrificing their career for education. There are also many highly prestigious MBA programs to consider in the U.S. However, with an increasingly global economy, the benefits of having a diverse educational background as well as international experience are becoming ever more valuable. This piece will focus on three programs abroad that you might want to consider when looking at graduate schools.

School: INSEAD, The Business School for the World Location: France, Singapore and Abu Dhabi Value Proposition: INSEAD offers a truly global perspective on business education, spanning three continents and fostering academic partnerships with institutions in North America such as Wharton. Offering an MBA, EMBA, Masters in Finance as well as a PhD in Management, INSEAD is the go-to school for management consulting firms with 44% of graduate students hired into consulting. INSEAD graduate students are commonly recruited by prestigious consulting firms such as McKinsey, BCG, Bain, and Booz.

School: London Business School Location: United Kingdom Value Proposition: London Business School is partnered with 33 International Exchange Schools providing a variety of unique experiences and networks to its graduates.

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variety of diverse perspectives, LBS gives its graduates one of the most versatile MBA degrees the globe has to offer. In addition, students of London Business School are placed in the heart of the world’s leading commercial and financial centre.

School: Hong Kong University of Science and Technology Business School Location: Hong Kong Value Proposition: Consistently ranked as the #1 MBA program in Asia, HKUST Business School has risen to international prominence at an incredibly fast rate with its faculty composed of former top-executives with highly diverse backgrounds. With such high quality staff, students are guaranteed an engaging and stimulating environment. HKUST also provides a team-based learning approach that combines diverse groups, fostering a global outlook for its graduates. Located in the heart of Asia’s economic centre, HKUST boasts a 97% placement rate for its graduates with half of them going into finance and/or accounting upon graduation.

These are just three of the many amazing graduate opportunities that exist for business leaders looking to take their education and credentials to the next level. In the modern world, performing with diverse groups in the ever-evolving workplace is a key element for success. Global graduate programs such as these give their students the benefit of a diversified learning experience in addition to being top-tier programs. Global experiences and education can open many doors. ////

Venturing

Out with AIESEC

By Sylvia Novac

As the saying goes, “The magic happens outside your comfort zone!” As young adults, we were likely brought up to believe in one definitive path to “success” involving further education, full time employment, and obtaining exponentially, fat pay checks.

Times are changing however, and with globalization becoming a significant aspect of our everyday lives, the world seems more interconnected than ever before. Venturing outside of our comfort zone by traveling the world to explore new perspectives has been made easier with AIESEC. AIESEC is a student-run organization aiming to facilitate and provide students with global internships and volunteering opportunities. With over 100 partners around the world, AIESEC’s volunteer and work experiences are mainly with non-governmental organizations (NGO) and social enterprises in countries such as Columbia, India, and Thailand. Alison taught English to students and adults in Brazil; and Thomas worked at an orphanage in Vietnam – the possibilities are endless.

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Chungsoon Haw, the President of AIESEC’s Laurier chapter advocates that “as a Canadian business or economics student, you have ideas that you haven’t been able to put into practice, so a volunteer opportunity with an NGO or social entrepreneurship is a great way to put these ideas into use while applying course concepts”. Almost every business has expanded to remain competitive on the international level, thus making it increasingly important to have these experiences.

Aside from gaining a better understanding of international markets, AIESEC provides students with the opportunity to experience new cultures. What we are accustomed to in Canada does not hold true to other parts of the world, as obvious as it may seem. Having international exposure is beyond any academic theory, and differentiates you both on paper and in person.

“While abroad, I realized that there is a lot more to this world than just what our society has deemed as ‘success’…when I came back from India, my individual experiences became much more important than academics, and spending time doing things that I believe are important is what success now means to me”, says Chungsoon.

Step out of your comfort zone with AIESEC and dive head-first into the endless possibilities to create your own path as a global student. It becomes increasingly important to become experienced on a global landscape and develops well-rounded leaders. Whether it is six weeks working in a marketing firm in Brazil or teaching English in Czech Republic, it is up to you to take hold of the international opportunities at every turn. To learn more about your options this summer, visit aiesec.ca. ////

Being Culturally Aware with Laurier International

By Jeel Shah

“Culture is a set of unwritten rules.”

International travel is said to broaden the mind, widen your horizons, and provide new perspectives on life. In fact, author Henry Miller once said, “One’s destination is never a place, but a new way of seeing things.” New perspectives are always important in both business and in life. However, not everyone knows how to travel abroad, how to fit in, and most importantly, how to understand international customers and their different cultures.

Enter Ben Yang.

Ben Yang is the current director of the Global Engagement Program at Laurier International. He is a new Golden Hawk as of last February; however, he has big plans for the program and for the future of global internships at Laurier. Yang offers a unique perspective because he completed his undergraduate degree in China and did his masters degree in Canada. This combination allows him to not only understand the problems faced by students going abroad, but also to help students coming from other countries adjust to the culture change when arriving at Laurier.

According to Yang, “culture is a set of unwritten rules.” Understanding culture can be difficult due the subtleties and minute details that are not apparent to outsiders. It is not enough to just travel abroad and wait for a new perspective to present itself. Understanding culture must be a deliberate and conscious effort. Many cultures have different perspectives on things like leadership styles and work habits. For example, business people in Canada often consider assertiveness a requirement for leadership, but in other countries such as Vietnam or Saudi Arabia, the opposite is believed. In order to understand these nuances as a student, it is advantageous to use the multitude of resources that Laurier International provides.

Laurier has seventy exchange partners in more than twenty countries. Students have the chance to study, 10/Atrium Magazine Fall 2014

work, or even volunteer abroad. Students who want to study abroad can take part in Laurier International’s exchange program in third or fourth year. Other international internship or co-op opportunities can be found via the career center and AIESEC, and volunteer opportunities can be attained through Laurier’s partnership with Habitat for Humanity.

Suppose, however, that you are not keen on going abroad, but you still want to learn more about other cultures. Laurier International has a solution for that too. Currently, Yang is working on initiatives that can “internationalize students at home.” The idea is to give students exposure without traveling abroad.

These initiatives include international case studies, diverse residences, and a global kitchen.

For the diverse residences, Yang plans to have each residence split into three sections. Each segment would contain domestic, international, and exchange students. This exposes students to different cultures and would provide them with a deeper understanding of how these cultures work.

Learning about cultures both abroad and at home can be a daunting task for many. Yang suggests a practical approach to fitting in quickly and becoming ready to immerse yourself. He suggests looking at culture from a hierarchical versus equality approach, or consider individual and group interactions. By identifying a few of these relationships, students will be able to skip awkward moments and begin to understand the reasoning behind the relationships themselves.

Culture is a combination of many different things, and studying, working, or volunteering abroad is the step that brings it some clarity – a fresh perspective.

However, that is only the beginning. Understanding customers and coworkers takes time and deliberate effort. According to Yang, it is a lifelong process and struggle, but in the end, it is worth it. ////

Internationalizing SBE with Dr. Michéal J. Kelly

By Joe Sheridan “I am not a subscriber to the Thomas Friedman’s view that the world is flat. I think it’s still pretty lumpy,” Laurier School of Business and Economics Dean Dr. Michéal J. Kelly says in explaining his interpretation of globalization. He adds that the trends are heading toward increased globalization, but we are not there yet, “let’s call it a state of semi-globalization as opposed to being fully globalized.”

ly. The SBE’s campaign to move ahead is ambitious including more aggressive marketing, increased scholarships for international students, and more opportunities for international exchanges. The overall goal is to build Laurier into an internationally recognized brand, while producing top quality alumni to act as global ambassadors.

According to Dr. Kelly, it is precisely because the world is not fully globalized that preparing students for confronting barriers to international business is so important. On the role of preparing students for a globalized world he states, “We firmly believe in preparing students for the world in which they will be working, and that will be an increasingly globalized world.”

An important aspect of increasing the internationalization of the SBE is increasing international exchange opportunities for students. Dr. Kelly reflected on his own experience as an undergraduate student on an international exchange in Belgium, “I found it a great experience in terms of getting to know myself and taking the risk of living in an unfamiliar culture.”

The Dean further detailed the benefits of international experiences in developing character, maturity, and broadening perspectives beyond what is learned in the classroom.

If anyone should know about the importance of internationalization it is Dr. Kelly, who has extensive experience ranging from the Canadian Department of Foreign Affairs working with international technology companies, to specializing in international research as a professor of International Business. These past experiences have given Dr. Kelly invaluable experience. “I have contacts in research institutes, universities, and embassies all over the world which I am now using in my role.”

These connections enable Dr. Kelly to assist in making the SBE into Canada’s top business school, a transformation that relies heavily on increased internationalization. At the core of this strategy is the ambitious Building Canada’s Best Business School campaign and the $103 million Global Innovation Exchange being constructed on University Avenue.

While Dr. Kelly explains his vision for the future of a dynamic internationally focused SBE, he recognizes that there is much work to be done, especially when it comes to increasing Laurier’s profile international11/Atrium Magazine Fall 2014

When asked about what advice he would give to students about international experiences, Dr. Kelly replies without hesitation, “Get some. I think it will serve you well to do an exchange, international co-op, or a study trip.” In addition to developing character, Dr. Kelly adds that international exposure benefits students since international experiences are something increasingly sought after by employers in potential candidates.

With the SBE’s new marketing campaign, increased international focus, and the new Global Innovation Exchange coming to fruition, the SBE is on the cusp of a transformational change and it is a sentiment that excites Dr. Kelly, “I believe the coming year will truly be one of the best in the history of the SBE.”////

The Sustainability of Globalization: An Interview with Dr. Barry Colbert

By Hayden Moffat At the forefront of issues surrounding globalization is the concept of sustainability. With the population continuing to increase, there is a growing concern of the amount of resources that humans use. Dr. Barry Colbert, associate professor here at Laurier, has focused his research and education on the concept of sustainability and creating business strategies that accommodate the issue of resource scarcity and overall well-being. His international teaching experience has helped him develop a deep understanding of the opportunities and consequences of globalization.

Before Dr. Colbert was a professor at Laurier, he worked for two decades in the steel industry in Hamilton. He came to Laurier in 2007 and in 2008 he took over as director of the P&G Centre for Business & Sustainability. The centre’s focus is to, “Serve as a catalyst for more progressive sustainable business practices to bring students, faculty, and businesses together.” There are five main areas of focus, which are teaching, research, civil society outreach, business outreach, and student support. The goal is to bring them all together around the concept of sustainability.

Dr. Colbert also serves as Board Chair for Sustainable Waterloo Region, which is a regional NGO that extends the goals of the P&G Centre for Business & Sustainability. Their flagship program gets local organizations to commit to lowering their carbon emissions through four steps: commitment, application, education, and celebration.

So what does the concept of globalization mean to Dr. Colbert? According to him, “the term globalization means integrated value chains.” This can be easily seen by looking at all the electronics that students use every day. The different components for these devices are found from all over the world.

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that we use. In other words, “national borders mean less now.”

There are many successes that emerged with the rapidly developing global community. Information communication technology has allowed people and businesses to connect with each other around the world. More people are migrating to cities and businesses continue to grow.

Unfortunately, there are some issues to consider.

With a combination of increased growth and non-renewable energy usage, there is a greater strain on the environment. To counteract part of these challenges, some global companies have started to shift their strategic portfolio from fossil fuel energy into more sustainable value chains. For example, Dupont has moved away from using nylon, which uses oil as an input, to other biotechnical materials.

The question now is, “Are global companies doing enough to develop sustainable business models?”

It would depend on who you ask. There are some companies that are going above and beyond to look into more sustainable value chains. On the flip side, there are companies who are only meeting the requirements, and if the equations change, they will continue to do just that. But in Dr. Colbert’s opinion, “overall I am encouraged with what I’ve seen in the last five years, but there is still work to be done.”

As a global business student at Laurier, there are course offerings that focus on sustainable business practices. Dr. Colbert’s Business Strategy for Sustainability course, BU 411, runs in the winter term this year, which focuses on sustainability as the context for global business value creation. There is also a BBA option in Business & Sustainability and the MBA program offers a similar concentration in sustainability in their graduate program.

The biggest advice Dr. Colbert has to offer to global business students is to travel. “Go see something beyond your world and get out of your comfort zone… be curious and ask questions.” By examining the trends going on all over the world, students can better prepare themselves for the ever changing global business environment. With increased connectivity around the world, being a part of the global community has never been easier. ////

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GLOBAL LEADERSHIP WITH FORMER PRESIDENT OF

By Eric Luong The Consumer Packaged Goods (CPG) industry is valued at approximately USD$2 trillion in North America, with Procter and Gamble (P&G) leading the market worldwide with USD$83.6 billion in 2013.

From P&G’s standpoint, they aim to “provide branded products and services of superior quality and value that improve the lives of the world's consumers, now and for generations to come.” How do they stay true to the world’s consumers without compromising quality and value? How do they market internationally?

Tim Penner has been working towards this mission for almost 33 years and is a Laurier Alumni, not-forprofit activist, and former President of P&G Canada.

In his role, the impacts of globalization are real: ‘At its core, globalization comes from the desire to do things efficiently…If one marketing campaign will resonate with consumers all over the world, then a company doing business that way will win. On the other hand, it doesn’t always work.

Regional differences and preferences can make it impossible to ship identical products all over the world.

In that case, local flexibility will win. The trick is to figure out the right spot along that continuum for the business you are in.’

When Tim Penner first started at P&G they did not always take such a global approach. Each country had separate operations; decisions in marketing, human resources, finance, research were all made independently in each country and ‘amazingly inefficient’.

He states most CPG categories have more similarities than differences and that value remains the important factor for most consumer goods. Manufacturing these products in a single world-scale plant at the lowest cost and being able to ship them across the world is a facet of a company like P&G’s success.

From his beginnings as a marketing graduate, to leading brands on multinational levels, Tim has been with P&G. He has worked in multiple offices in

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multiple countries across the world including those in the UK, and the US. Despite P&G employing the same business approach and terminology across the world, he noticed the differences in business mannerisms. For instance, “class played a huge part in the UK… the head of Sales would wear his school tie to important meetings…the tie from his school as a little boy. People in the UK also automatically warm to those of us from the ‘colonies’ so being Canadian was an advantage.” There was also the emphasis on “how much the topic of sports is discussed as part of business” within his time in the US. Tim was stretched outside his comfort zone; he had to learn fast, and learn to adapt. He had to look at extreme details when planning out strategies, and trust his team and local agencies even more so. This was because, as Tim explained, “none of us is truly representative of the breadth of wants, needs, and tastes of the consumers we serve. Relying on your own view of the world is a trap as a Marketer.”

Professionally, Tim’s advice to students on globalization is to “start by studying abroad for a term. It will open your mind. When you think about a career, I would encourage you to at least consider a company where international transfers are possible. If you are fortunate enough to get the opportunity, remember to stay open and adaptable. Think of it as an adventure.” By adopting this mindset, Tim and his family had an amazing experience.

Tim developed immensely as a professional and a person. Now retired, he serves on many boards: Board of an Intact Insurance and Club Coffee, SickKids Hospital and MaRS Innovation. Although there were times where Tim missed his friends and family working abroad, he kept an open mind and considered his six years abroad an adventure. “You really must look at the half-full side of the differences if you are to be successful,” advised Tim. ////

World Leadership At Home

By Jeel Shah "If your actions inspire others to dream more, learn more, do more and become more, you are a leader" - John Quincy Adams, the sixth president of the United States.

A “global leader” is often used to describe individuals who are able to motivate and inspire those around them in an international and multicultural context. Torwomenye Kwasi (TK) Azaglo is an example of a global leader. According to the Laurier global engagement programmer and alumni, global leadership does not mean visiting places around the world and trying to make a change; in fact, it means the exact opposite. Global leadership means starting from home.

TK Azaglo came to Canada when he was seventeen from Ghana. Upon arriving, he was constantly asked about his home, many of which were based off Western stereotypes. Did you eat dirt in Africa? Did you know how to dress when you came here? These questions, led to him hiding his heritage and culture.

It was after he attended a conference with former UN General Romeo Dallaire that he began to embrace his roots and dispel his identity crisis. When TK asked General Dallaire about the future of Africa, he replied ‘the future of Africa lies in the hands of children and youth who take leadership responsibilities for issues they see around them.

TK, in sudden inspiration, blurted out "I am the Future of Africa". In this instantaneous statement, an organization called "Future of Africa" was founded with a mission to change the negative stereotypes associated with Africa and bring continuous and sustainable growth, to the continent – more specifically Ghana.

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As he travelled to Uganda, he helped the local communities by building computers, chicken coups and sports programs for children. In providing infrastructure and the needed supplies to these places, TK began to realize how unsuccessful these efforts were when he left. Everything fell apart. Upon his departure, the community was not invested in the idea as much as he was and thus, the development was not sustainable. The solution was to implement local ownership by empowering the community to lead their own developmental ideas, and provide them the support that they require. Transferring the risks and rewards of their own plans is leads to sustainable and continuous improvements.

On becoming a global leader, TK advocates that any trip abroad is valuable experience as long as students come back and make changes in their communities. The international experience is just the half of it; coming back and implementing those lessons learnt to help the people around is the other half.

For students who have made a difference in their communities and want to expand their ideas into other countries, TK has the following advice: “You need to know the context in which you work in, the people around you … partner with someone … who is already doing something and approach them”.

Identifying and understanding the people who want help and furthermore ensuring further development of initiatives afterwards are two considerations.

Global leadership does not have to be about going abroad and making a difference. Being a global leader can start at home - by motivating people to produce change within their communities. ////

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BUILDING

CANADA’S

BEST BUSINESS SCHOOL

Q &A

With Dr. Michéal J. Kelly

Atrium Media Group (AMG) sat down with Dr. Michéal J. Kelly to discuss the Global Innovation Exchange and how it fits into the future of Laurier’s School of Business and Economics.

Recently you helped launch the “Building Canada’s Best Business School” campaign. How does this campaign fit with your overall vision for the SBE? The fundraising campaign focuses on a number of areas. One major goal is to promote the internationalization of SBE by creating opportunities for students to go abroad on extended exchanges. Additionally, the campaign will allow us to attract and retain the best faculty through investing in research and chairs.

Part of the money will go to scholarships and bursaries in order to attract the best undergraduate and graduate students from around the globe.

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It has been exciting to watch the Global Innovation Exchange take shape and to see the progress that has been made. Will the new building be completed on schedule?

I have no official announcement in terms of where we are in completing the building. My hope is that the building is completed on time, but it is difficult to gauge with construction projects. A lot of progress has been over the last few months, however, the future will depend on the type of winter we have this year.

Could you elaborate on the meaning of the name Global Innovation Exchange and why such an unconventional name was chosen?

Honestly, I have no idea why the name was chosen and I don’t particularly like the name. I think we will probably rename the building sometime in the future.

Naming the new building and the School of Business and Economics will go a long way in giving Laurier the national visibility and distinction we should have as one of Canada’s leading business schools.

While the benefits of the new building to the SBE are obvious, will students of the other faculties at Laurier also benefit?

Anything that raises the visibility of Laurier as a university provides benefits for other faculties and other students. I have not heard anything official about which faculties will be moving into the Peters Building and the Schlegel Centre, but once we move to the GIE, I know that Peters is scheduled to be taken offline for major renovations.

The GIE will certainly be a modern facility that offers significant improvement over the buildings that the SBE currently occupies. What features of the new building are you most looking forward to?

There are a number of really great features in the new building. It will have phenomenal space for students and clubs compared to what we currently have available. This will create room for students to gather in groups or study independently. There will also be a state of the art finance lab including Bloomberg terminals, which will improve the teaching resources available for our finance courses. It will also have a four-story atrium that will be a great place for hosting events. There will be innovative flipped classrooms, which will allow us to change our pedagogy in some areas. It’s going to be a fantastic building for Laurier students.

A LOOK INTO TRANSFER PRICING

By Tyler Wang Laurier business students are known for their ambition, the drive to one day land an executive role at a Fortune 500 multinational firm. Understanding large multinational corporations is important in order to take full advantage of opportunities. What makes a multinational unique from a regular domestic business? Multinationals have separate legal entities in various jurisdictions, thus one of the unique challenges it faces is taxation by the various jurisdictions.

This unique challenge is both a threat and an opportunity for those multinationals. It is an opportunity for specialized tax practices revolved around a tax issue known as transfer pricing multinationals allocate profit within multiple nations with aims to pay less in overall corporate taxes. However, with this unique opportunity come additional costs and challenges.

Under the Canadian Income Tax Act, Section 247 defines transfer pricing, with respect to a transaction, as an amount paid or payable, or an amount received or receivable, as the case may be, by a participant in the transaction who does not deal at arm’s length. In this context, transfer pricing is the cost of transfers of goods and services between separate entities of the same multinational corporation. “In a broad term, it can be any transfer between business functions, but the major concern in the global sense for multinationals is trying to shift income between entities to lower tax jurisdictions, so on the global level the tax is minimized�, states Ling Chu, Associate Professor of Accounting at Laurier. Her experience within International Taxation at Deloitte LLP has given her an encompassing view on transfer pricing. Professor Ling Chu teaches Taxation III at WLU and has published in journals such as the European Accounting Review and the Canadian Tax Journal.

Corporations often buy and sell to themselves which welcomes criticism as to whether they are manipulating prices to charge whatever they want and overcharging their subsidiaries in higher tax jurisdictions. What stops them? The government, they 18/Atrium Magazine Fall 2014

ensure that the corporation conducts transfer pricing at a fair market price, rather than whatever price they please. To combat corporations from shifting too much income to low tax jurisdictions, a group of countries, the Organisation for Co-operation and Development (OECD) are working together to come up with systems which allow global information sharing, cooperation and tighten auditing efforts, subsequently allowing for better fair valuations of those goods and services. This is where the challenge appears for corporations and opportunities materialize for highly skilled business professionals: compliance.

In order to ensure compliance with the government, corporations and professional consulting firms hire extremely qualified, skilled and talented professionals, sometimes PhDs, to ensure compliance while minimizing their taxes. This of course costs corporations a lot of time and money, especially because in recent years, governments around the world have been increasing their collaboration and enforcement on transfer pricing. However, this is a mandatory cost of doing business for those multinationals. Ling Chu can speak to the tremendous growth in the specialized field of transfer pricing. She states that the field provides a rare opportunity for economists to enter consulting. Although this is a field not normally open to undergraduates, it is a viable, profitable and growing opportunity to consider for the future. ////

A Story of the Past, Present and Future of Globalization’s Impact

By Katelyn Dong Charles Darwin said, “It is not the strongest species that survives, but the one most adaptable to change.”

Warren Frederick Boyd, President of R.T Boyd Limited, is an example of this adaptation to modern day changes in business .

Russell Thomas Boyd was born in Sydney, Australia and immigrated to Canada in 1954. At that time there were tough currency exchange controls in Australia and money from selling their home could not be transferred out of the country. Russell decided to invest in Australian opals to transfer his assets to Canada. The Australian Opals sold well in USA and Canada, so in 1956 Russell founded R.T Boyd Limited (RTB) as a vendor for opals, diamonds and coloured gemstones, including emerald, ruby, and sapphire.

To Warren, globalization is how the events that occur in the far corners of the globe have an effect on commodities, products, and businesses.

For example, the strong demand for opals in Japan in the 1980s drove up purchase and selling prices of opals in Europe and North America.

Globalization changed the gem and mining industry in the past 40 years and revolutionized RTB’s traditional business practices. Domestic business was done face-to-face and international sales were rare; Hong Kong clients meant scheduled phone calls, cables, telex, and occasional trips, which were expensive relative to today. Fax machines were new and improved the efficiency, and cost, of international communications across time zones. The advent of popular jewellery trade shows in the US, Europe, and Asia in the 1980s, and the explosive development of the Internet, resulted in the commoditization of diamonds.

Traditionally, RTB supported local diamond dealers on an open account basis. After the World Wide Web, diamonds were now a cash-on-delivery (COD) basis directly from the diamond cutters in India, Israel, or Belgium, and would arrive two days later via FEDEX shipment around the globe.

“If I don’t do this, I’m not competitive. But it means I can fill specific orders of fine diamonds competitively

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and quickly from cutters in India for sale to clients in Canada, the USA, China, or Europe,” Warren says.

Of course, there was an upside to the eruption of the Internet: VOIP telephone communications, high-resolution imaging, and instant messaging.

“Traditionally, jewellery designs were created by skilled craftsmen with hand carvings from wax at a high cost. Today, I can have my jewellery design created in Thailand and printed in Toronto. Modern communications reduced my costs and increased my productivity,” Warren says.

However, creditworthiness of clients in the remote corners of the world remains one of the biggest challenges for RTB. RTB deals with big-ticket items and requires a client-supplier trust relationship, which is difficult to achieve without face-to-face interaction.

With global transparency of pricing and availability, profitability becomes a challenge for dealers and middlemen.

Globalization allows Warren to capitalize on his knowledge and expertise. He has formally developed emerald mines in Russia, opal mines in Mexico and ruby mines in Greenland. The scope of business has seen significant growth; RTB ships diamonds and other gemstones to clients in Europe, USA, Malaysia, India, China, and Thailand. Currently, Warren is working on developing sapphire mines in Montana and tourmaline mines in Brazil. The future for RTB is in the two ends of the jewellery pipeline: the miner and the retailer.

“I realized profitability lies in the two ends. I prefer to position my business where I’m selling to international stone dealers rather than trying to compete against them in the sale or distribution of a gemstone commodity,” says Warren.

Consumer confidence in the quality of gemstone products may be the biggest challenge for the future.

Glass filled ruby composites, which are cheap and inexpensive, are now common in retail stores but are rarely declared as composites. The need for profits has driven many unscrupulous vendors to misrepresent their products. If this is not addressed, then the global community may lose confidence in all coloured gemstone products.

Globalization is an ongoing process and it ultimately means change. In order to survive and thrive, businesses must innovate and adapt to these changes.

This is the challenge of the twenty-first century enterprise. ////

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20/Atrium Magazine Fall 2014