Globalization is far from extinct; TSMC and the United States need mutual adaptation: Interview with the Director General and Dean of Thunderbird School of Global Management

Dr. Sanjeev Khagram, director general and dean of Thunderbird School of Global Management in the United States, gave an exclusive interview to CommonWealth Talent Sustainability Channel, offering unique insights into the challenges faced by TSMC's establishment in the United States and the internationalization of Taiwanese businesses.

As Taiwanese businesses expand globally, the challenges of corporate internationalization become increasingly evident. TSMC, which established a plant in Arizona, USA, at the end of last year, encountered issues related to cultural differences in management, highlighting that even the most outstanding Taiwanese companies can face difficulties when managing international talent.

At the invitation of Stan Shih, the founder of Acer Group, Dr. Sanjeev Khagram of the Thunderbird School of Global Management visited Taiwan at the end of July, collaborating with Soochow University to jointly promote the "Taiwan Going Global Initiative," with the hope of assisting Taiwanese businesses in navigating the complex and ever-changing path of internationalization.

Thunderbird School of Global Management, located in Arizona, USA, was founded by a retired World War II general in 1946 with the belief that "borders frequented by trade seldom need soldiers." Thunderbird was recently named No. 1 in the world in international trade by Quacquarelli Symonds (QS), the premier global higher education analyst organization. Scoring 100 out of 100 points, this top ranking places Thunderbird ahead of Harvard, MIT, and Stanford, domestically, and Victoria University of Wellington in New Zealand, Nanyang Technological University in Singapore, and University of Cambridge in the United Kingdom, internationally.

As a renowned scholar in leadership and strategic management, Dr. Khagram has been the Dean of the Thunderbird School since 2018. He emphasizes that the mission of Thunderbird is to nurture global leaders, making it not just an American institution but an international school located in the United States.

Dr. Khagram has assisted numerous American companies in their internationalization efforts, and he has unique observations about the challenges TSMC faces in the United States. In response to claims that "globalization is dead," he firmly believes that "globalization is far from dead; it is in a process of recalibration." Following TSMC's establishment in Arizona, all Taiwanese graduates of Thunderbird joined TSMC last year, and the number of students recruited from Taiwan is expected to increase tenfold in the coming years.

The following is an excerpt from the interview between the CommonWealth Talent Sustainability Channel and Dr. Khagram:

Talent Sustainability: How is TSMC faring in the United States?

Dr. Khagram: We are just beginning to establish a relationship with TSMC. TSMC faces an extremely complex situation. The United States has undergone significant changes over the past decade, with increasing political polarization, and Arizona is one of the most complex regions in terms of political and cultural environments in the United States.

Their choice of Arizona has reasons behind it. On one hand, it's a desert, making it suitable for chip production. The economy here is also growing, and there is a wealth of talent. Arizona State University trains 40,000 engineers annually. So, TSMC's choice of Arizona has solid reasons.

The challenge TSMC faces is cultural. Culture isn't static; it changes over time, but there are some established cultural norms and ways of doing things. There are significant differences between Taiwanese and American cultures in terms of performance and hierarchical decision-making.

Moreover, TSMC is one of Taiwan's top companies. They're used to being the first and having influence. But in the U.S., very few people know who TSMC is, and many don't even know where Taiwan is. So, there's a lot of communication work to be done, not just in managing employees but also in helping local residents, government officials, and other stakeholders understand Taiwan, TSMC, and even the semiconductor industry. These things take time.

Talent Sustainability: That requires a lot of communication. How is TSMC's progress?

Dr. Khagram: Given the circumstances, TSMC had to make quick decisions, and the investment is substantial, putting them under tremendous pressure. Therefore, TSMC is going through a steep learning curve, and that's where Thunderbird hopes to provide expertise.

I'd like to point out that compared to consumer industries, the globalization of capital-intensive high-tech industries is very different and unique. It requires high levels of technical competence to produce products with very high specifications, making it a significant challenge. Additionally, the semiconductor industry is highly politically sensitive and involves even more complex political dynamics. TSMC is dealing with a lot of pressures on multiple fronts.

For TSMC, the current main focus is on learning English. Most of the emphasis is on technical English. However, a manager needs more than just technical mastery; understanding culture is more important. This includes understanding expressions, subtext, body language, and so on, and mastering these things takes time.

I want to emphasize that this understanding is not a one-way street. It's not just about Taiwanese at TSMC adapting to American culture; American employees also need to understand and recognize that they're part of a Taiwanese company. So, it's not just the Taiwanese adapting to American culture; they're also helping Arizonans understand Taiwanese culture.

From our conversation, it's clear that they spend less time focusing on American employees and assisting them in understanding Taiwanese management and TSMC's culture. TSMC has a strong culture, and all successful large companies have a strong culture; anyone joining the company must become a part of that culture.

Americans have entirely different cultural values. How does TSMC recruit employees in the United States who understand or are willing to accept different cultures and work styles? Clearly, TSMC in the United States needs high-level, specialized talent, but we don't have enough of that talent, so that's also a major challenge.

Talent Sustainability: What capabilities does a company need to have in order to go international?

Dr. Khagram: Having a global mindset is crucial, but a global mindset isn't just about knowledge; it also includes cultural understanding. Do you understand geopolitical dynamics? Do you understand different social systems? Are you enthusiastic about cross-cultural communication and learning? These are all part of it.

Next, having a comprehensive global strategy is critical for companies. How to choose markets? In what form to enter markets? Are joint ventures on the agenda? How to handle human resources? Should different locations adopt different models? How to balance corporate culture with local culture?

Most Taiwanese companies don't have a very clear interpretation of their corporate values or business models, so how do you help foreign employees understand your way of working? How do you interact with the local community? What do stakeholders in the community expect from your company? Conditions may differ in different parts of the world, but for any company entering a foreign country, it's not just about obtaining legal permission to operate; it's also about passing the test of local culture.

If your company only intends to operate in one country, then having one operating model may suffice. But if you want to continue innovating and changing, if you want to expand in multiple countries and cultures, dealing with different tensions and systems, then you must keep learning and exploring paths forward.

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