Distinguished Professor Christopher S. Tang, the Edward W. Carter Chair in Business Administration, came to UCLA Anderson in 1985 and counts the global perspectives and open-mindedness of his students as a major reason to stay. Tang has seen supply chain management evolve from a largely in-house concern into a decentralized global phenomenon that affects businesses large and small. Tang is one of the foremost scholars on the subject, having published more than 100 articles in academic journals, magazines and newspapers. His latest research addresses social and corporate responsibility, which he believes should be as important as profits to any company leader. Above all, he says, global leaders must expect and respect cultural differences in order to succeed.
Q: What does supply chain management entail?
This is a very important area that every single company is encountering — especially when they are no longer doing everything in house. Whenever you hear the words “vendor,” “independent contractor,” or “supplier,” you have supply chain issues in the context of producing products or producing services.
So no matter whether you’re dealing with manufacturing or service companies, including online retailers like Amazon.com, you have to manage material flows all the way from the supplier to the hands of the customers. You have to think in terms of information: How do you capture the information so that you can facilitate the transaction, as far as material flows as well as financial flows? Since the rise of global competition and global trade, things have become very interesting.
Q: What are some examples of companies with supply chain issues they didn’t have before they were outsourcing to contractors?
IBM used to make everything in house — copiers, batteries, everything under the sun. Same with Hewlett-Packard. Then, in the 1970s and ’80s, with globalization, with suppliers being more available, accessible and affordable, companies changed their business models. IBM’s Lou Gerstner actually may have been the first to eliminate virtually all the company’s manufacturing divisions. IBM transformed itself. They outsource virtually everything now. But because of that, they have to manage all their suppliers, from manufacturers to distributors to customers.
I started at IBM and I evolved as companies and the world changed. I used to work on internal production planning problems at IBM. Then I realized that was no longer needed when everything’s outsourced. When you no longer manage everything in house, how do you go about doing that? That got me interested in global supply chain management.
Let me use an analogy: If you find it difficult even to manage the people that work for you directly when your firm is vertically integrated, can you imagine the challenge when you try to manage a process that is performed by an external company? And those employees don’t work for you. On top of that, it’s more complex when these companies are not even located in the U.S. They have different languages, different roles, and different cultures. And then you also have to ship the product across the ocean. How do you manage that? You don’t even know! I found it fascinating to manage the business relationships, international contracts and the materials, information and financial flows along global supply chains. Based on my personal experience, I find respect, trust and culture play important roles in managing global supply chains successfully.
Q: You do a lot of teaching and other work internationally. You’re one of the founders of UCLA Anderson’s Global Executive MBA for Asia Pacific (which offers a dual degree from Anderson and the National University of Singapore), by all accounts a very successful program. What was the impetus for it and how has it evolved?
I observed and learned from what was happening in the business world. We saw companies like IBM, HP, Amazon, Zara and even Uber reaching out to their external networks to leverage capabilities so they could grow internationally, and also so they could compete. Supply chain issues come into play; when companies manage those, they realize it’s also a global issue because operations no longer occur in one location. Global education is critical to many corporations, especially U.S. operations that have to deal with suppliers and contract manufacturing in other countries.
In order to be a global citizen and a global manager, you need to speak, possibly, some foreign languages; but even if you don’t, at least you understand and respect different cultures, and you understand how things operate differently in different environments. Today’s MBAs need to have this kind of sensitivity, understanding and respect in order to succeed. This is what I believe in and what motivated me to found the UCLA Anderson-NUS dual degree. It’s a platform to enable our students to truly emerge and learn in a different environment, where they will gain this kind of first-hand global experience. In order to be a global manager or leader, you must “think global and act local” effectively.
Q: To hear you describe it, MBAs have to be global business leaders, even if they’re doing all their business in the U.S. There are so many links in this supply chain that extend internationally.
Absolutely. Successful companies manage their global supply chains effectively; examples include online retailers such as Amazon.com and Alibaba’s T-mall, brick-and-mortar retailers such as Walmart and Zara, and startups such as Xiaomi and Warby Parker.
If you think about global markets, the U.S. market is, by and large, saturated. And the European market is stagnant. So, if companies are looking for growth, where do they look? I think the mindset has shifted. Before, maybe they thought they would leverage low costs in developing countries; now they’ve realized those places are not just providing the labor, the market is there, too. Now many companies are thinking that instead of just producing in the developing countries, it’s also possible to sell their products and services as well.
Q: You’ve been at Anderson for 30 years. But you’ve also had many opportunities to guest teach and lecture at universities all over the world. What is it about Anderson that keeps you inspired?
I love Anderson partly because the students are global. And they’re curious and talented and they have fresh minds. That gives me joy! Working with younger people, hopefully, enables me in some small way to shape the future.
It’s always good to explore different environments because you always learn something new. I’ve visited many universities, including London Business School, Stanford, UC Berkeley, National University of Singapore, Hong Kong University of Science and Technology… Different schools have different strengths and also different mindsets. I found it fascinating that the different student bodies have such different interests. At UCLA Anderson, the students have broad international perspectives. At Berkeley Haas they’re more focused on technology companies — which I also found refreshing. In Asia, students truly believe in global manufacturing and supply chain because the actions are happening there.
Q: You’ve published prolifically, sometimes with MBA students as co-authors. Do those collaborations transpire organically or do you embark on certain projects with students in mind?
I do this because it’s what I believe in as part of the MBA education. I want to provide a memorable experience for the students. If they write an article, 20 years later, they still remember the experience. That is priceless. It develops students’ intellectual thinking. MBA students, by and large, don’t publish; it’s not in the tradition. The MBA is getting much more competitive. Having an article published in a recognized magazine or journal helps students stand out because it reflects their capability to think and to write — a skill I think many companies value. It’s a good exercise for students to explore and I believe it will help them establish their careers better, too, especially in consulting firms. They like the MBA students to be able to think critically and to write and communicate effectively.
Q: Is it important to you in your own publications that they reach audiences beyond a professional cohort?
I believe that as an educator you’re not only reaching out to a community in your profession: I believe we should share with and educate other people outside our community. I write magazine articles, I write technical journal papers, I write blogs for the Anderson School at UCLA, Haas School at UC Berkeley, and for different academic journals — it’s part of our duty to create knowledge through our technical writing but also to disseminate our thoughts to a wider audience.
Q: What’s the focus of your most recent research?
For the last five years I’ve pursued a new area I’m quite passionate about: social innovation for developing countries. As more companies and entire developing countries realize they have created environmental problems or social and economic inequities among poor workers such as farmers, as has happened in China, India and Africa, major corporations are beginning to realize they are part of the cause of problems.
Many corporations realize that if they want to operate successfully in emerging markets — either to source from those countries or to sell to those countries — they need to become good global citizens. They need to find ways to operate that will be seen by the world — by consumers, by the workers, by the government, by NGOs — as doing good. I’m motivated to look at how companies can operate in the environment such that they are truly doing good and doing well at the same time.
Corporate responsibility, social justice, and environmental stewardship can go hand in hand. This coincides with the eight United Nations’ Millennium Development Goals (MDGs) for 2015. So I think many companies, along with the government, NGOs and consumers, have started paying attention to these areas. In order to become a recognized global leader, whether as a person or as a company, you need to think about all these issues together. It’s not a “trade-off,” we need to think about people, planet and profit simultaneously.
Q: What’s your best advice for LGBTQ people going into global business professions?
It is remarkable how the world has changed. In terms of social progress, I think America has taken the lead. I think it’s wonderful how accepting we’ve become of minority groups that include LGBTQ people. Attending school in America and working for American corporations gives you a much better chance of acceptance. But, at the same time, I want students to be aware of the fact that, whereas many other countries are making progress toward acceptance, others are becoming harsher toward LGBTQ people.
In the mean time, to be a global citizen — especially if students aspire to be global leaders — they need to strike a balance in terms of how they view themselves and how they view a different world. They can operate successfully if they work and live in different countries and different environments, they just need to be aware of that, although the world is making progress, some countries are still way behind.
Q: What do you think will change the trend toward harsher treatment in some places?
That’s very complicated because it involves politics and, often, religious beliefs. Those are things that are not going to change in a short period of time. Meanwhile, we need to expect differences. You don’t have to accept differences but you do have to be aware of differences. So, instead of expecting the whole world to change immediately, why don’t we, as Gandhi encouraged us to do, learn how to change ourselves in order to change the world?
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