A Projectfor AID in Central America
Transcript of A Projectfor AID in Central America
By George C. Lodge, Lecturer and Administrative Assistant.Division of International Activities
Under contract to the Agency for International Development the Schoolstarts a new expl!riment in assisting developing countries.
A Project for AIDin Central America
Preliminary Investigation
In light of this request, Dean Bakerdispatched Professors Henry Arthurand Thomas Raymond and me toCentral America in April 1963. Theassignment was to make a three-weekpreliminary investigation. We foundthat there was, indeed, a need formanagement development. And wefelt that the School could make a realcontribution toward meeting thatneed. Per.haps most importantly, wefound an enthusiastic group of capable, influential, and progressive businessmen who were prepared to investtime and money to provide management education in the region. Thesemen - three from each country met with us in Guatemala City andagreed to return to their countries andestablish national committees to promote the idea within the businesscommunity.
Upon our return to Boston, theFaculty voted to continue o~r investigation of management dev~lopment
needs and opportunities in, CentralAmerica. The result was that lastsummer, from July 1 to the beginningof September, Professor Raymondand I returned with a seven-man research team l to identify the principalproblems of managers in the region,to find out where previous management training efforts had fallen short,and to make recommendations concerning future activities of the School.The research was carried out under agrant from AID and with the activeassistance. of the Central Americanbusiness community, especially thenational c~mmittees which providedoffice space and many useful contactsand introductions. The findings of the
President Kennedy, in a speech inSan Jose in the winter of 1963, committed the United States to providingmajor assistance to effect this integration.
1 Fnnds Aguilar. TobD Culbertson. DonaldHenley. C. L. Kendall. D.vid "uechle. lame.Trt'eJ. and Jane TbOt1lu. Profesoon RenatoTagiurl and Abnham Za1e=ilc, while not formally memOen of the ~. ,..ere in the regionfor. short time.
Hydroelectric power.
Indian business community, and theIndian government. It will offer itsfirst program this spring in a coursefor senior executives.
The second major foreign engagement started last spring. It is asimilar effort to assist the CentralAmerican business community in theestablishment of a Central AmericanInstitute of Business Administration(INeAE).
This project grew out of a requestfrom the late President Kennedy andTeodoro Moscoso of the Agency forInternational Development (AID) toDean Baker. They invited the Schoolto undertake a program of management development in the six countries of Central America: Costa Rica,Guatemala, Honduras, Nicaragua,Panama and EI Salvador.
Wc were informed that CentralAmerica was regarded as an area ofspecial and critical importance by theU.S. Government and that a primaryneed in the region was an increase inthe quantity of managers and an improvement in the quality of management. This was especially true becausethe region was well on the way towardeconomic integration and had, in fact,become the first group of developingcountries to form a Common Market.
With the creation by Dean Bakerof the Division of Intemational Activities, the School has taken a newapproach toward the fulfillment of itsinternational responsibilities. Underthe direction of Professor Harry L.Hansen, the Division is seeking toinsure
• that international activities willresult in returning knowledge to theSchool about a wide range of management problems abroad,
• that means will be available forthe conversion of this knowledgeinto useful teaching material for theSchool's programs, and
• that the· foreign activities themselves will be of maximum value tothe persons for whom they are designed.
Major Foreign Engagements
With these intentions in mind, theSchool now has two major foreignengagements. The first, which hasbeen under way for more than a year,is the establishment of an Indian Institute of Management at Ahmedabad,India. We are training faculty, preparing teaching material, and providing advice. This Institute is jointlyfinanced by The Ford Foundation, the
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negotiating with AID at this writingwill provide funds for extensive preparation and case development for theAntigua program. It will also providefor additional research in the regionto assist INCAE in getting off to agood start. That contract extends forone year from January 1, 1964.
The research team felt that theSchool is specially qualified to be ofassistance to INCAE at this stage inits development by virtue of
• its experience with teaching bythe case method,
• its orientation toward practicalproblems as they really exist ratherthan toward theory,
• its background of teaching invarious other developing areas of theworld, and
• the extensive knowledge of numerous members of the Faculty in theinternational sphere.
Perhaps most important is the particular - if not unique - competenceof the School in relating generalknowledge to specific problems and ingetting practicing managers togetherto analyze those problems.
Why Central America?
Some have questioned the locationof . such an educational venture inCentral America. "What about Someof the other areas of Latin Americaor of the world?" they ask. The research team in answering this ques-
Modern oil refinery.
George C. Lodge
AID will assist in financing thiseffort, although each partiCipant willpay an admission fee of approximatelySI,Ooo. The instruction will focus onCentral American management problems as they were identified by theresearch team last summer. ActualCentral American cases will be used.Classes will be conducted in English;but high-quality simultaneous transla·tion will be available, and all teach·ing materials will be in Spanish.
Once the top managers of the re·gion recognize the need for this typeof training, INCAE hopes to trainmiddle managers and eventually university graduates. The Board feelsthat the Institute will perform an extremely useful function in providingthe first place where Central American managers can come together forseveral weeks to study their problemsin some depth and to exchange views.This in itself will help solve one of themost basic regional problems - lackof communication and understanding.The Board hopes to recruit a permanent faculty for the Institute fromamong the Central Americans whoare ~ing trained in our InternationalTeachers Program here at the School.It also expects INCAE to be a valuable center for research and consultation in the region.
The contract which the School is
Thomas C. Ra:fmond
.carch team were contained in a~port to the Faculty, submitted in
October, and in a later report to AID.
Central American cotlon mill.
Central American Institute ofBusiness Administration
During the course of the summer,each national committee designatedone of their number, who in each casewas an outstanding leader of business,to go to San Salvador, the capital cityof EI Salvador. These six men electedFrancisco de Sola of San Salvador' astheir chairman and decided, then andthere, to form the Central AmericanInstirute of Business Administration(INCAE). They became its Boardof Directors and pledged development<If this Institute.
The Board envisions an importantrole for INCAE. It hopes to b~oaden
the vision of top managers in Central'America so that they can see theirproblems more clearly in the midst ofradical change and can realize thevalue of professional management.With this thought in mind the Boarddecided to offer a five-week advancedmanagement program in Antigua.Guatemala, in July and August ofthis summer for about 40 CentralAmerican managers. The Board invited the Harvard Business School toconduct this program, and the Facultyvoted in October to accept the invitation.
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tion draws attention to the unusualopportunities in this area for theSchool to learn about managerialproblems in developing countries.The team also underscores the opportunities for converting this knowledgeinto useful teaching mau-=rial for usehere and elsewhere.
Among other considerations in thisregard is the fact that an enthusiasticand organized management group,with whom we have already workedsuccessfully, has the determination,competence, and access to fundsnecessary to provide a sound base forfuture management development activity. Moreover, the region providesan e;tceUent laboratory for researchon the problems of management de·velopment in developing countries.
Comparing the six countries revealsgreat variety, ranging from CostaRica, with the highest literacy rote inLatin America and the purest democ·racy, to Honduras, which is one ofthe most primitive countries in thehemisphere. There is Nicaragua, asemirnilitary autocracy tending towarddemocracy and bursting with industrial enthusiasm. EJ Salvador is achieving remarkable industrial growth; somuch so, in fact, that it recently attracted a branch of the First NationalCity Bank.
Guatemala is currently a militaryautocracy, in which 50% of the population are unintegrated Indians. Panama, a commercial trading center forLatin America, of course, embracesthe Canal with all the problems arising from it. In effect, therefore, weare dealing with si;t different societiesat various levels of evolution. All ofthem, however, are bound by manyties, not the least of which is a com·man language.
Social and Strategic Significance
Central America is a region wherethe old social order is breaking downwith new, still obscure, forms takingits place. Strategically located as theconnecting link between North andSouth America on the Caribbean pe-
rimeter, it is thus a target for politicalintrigue and subversion.
The Central American countriesare currently on the crest of a development wave which gives to the region a spirit of hope and optimismnot found in maay parts of LatinAmerica. Change in this region canstiU proceed in an orderly WilY ratherthan through violent rt'voluti,on which seems an too likely in severalof the larger countries of LatinAmerica.
It is large enough to be significant(12 million population) and yet smallenough to be a good research site inthat movemeat and activities can bemeasured fairly simply and their effects judged relatively qUickly. At thesame time, the region is readily accessible (six hours by plane) and iseasy to cover internally on the ground.
Central America provides the onlye;tample in the world of less-developed countries undergoing economicintegration. This fact surely will beincreasingly imponant as tbe rest ofLatin America proceeds toward aLatin American Free Trade Association, and as similar regional effortsdevelop in Africa and perhaps Asia.
It is now the scene of vigorous international competition, oat onlyamong enterprises within the region.but also U.S., German, Swiss, British.<lnd Japanese interests which theCommon Markcl has attracted.
In short, Central Amcrica providesa convenient sile for observing andstudying most of the problems can·fronting not only locOlI m<lnagers indeveloping areas of the world but alsoof U.S. companies doing business inthose areas.
The region has the chance of be·coming a model for the rest of LatinAmerica as an e;tample of regionalintegration, economic development.and political rdonn. It is too early,of course, 10 say whether it will actually become such a model. But itis certainly an exciting opportunityfor the School to be a pan of an adventure with such important possibiIi
·ties. 0
Fuller
Associate D~an Fullu
On January 1. Stephen Herbert Fuller took over the reins as AssociateDean for External Affairs from Pr<rfessor Myles L. Mace. Mace, whohad occupied the post for the past 18months, is to be away from the Schoolfor the ne;tt few months on a consulting assignment to Anderson, C1aytc.,& Co.; ne;tt autumn he will be backleaching in the area of internationalbusiness. Fuller brings to his appointment an impressive array of qualifications aDd e;tperience. Referringto him recently Dean Baker said:"With a little e:tperience in this newjob under his belt, Steve will be aboutthe best-rounded man we've gOl."
Teacher, Director, Consultant
Fuller has been on the Faculty hereat the School for the past 16 years.
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