Jagdish Sheth, Marketing & Global Business

 


"Why do good companies fail?"  Imagine Duane Ackerman, CEO of BellSouth Corporation, posing that question a few years ago to his advisor Jagdish Sheth, Charles H. Kellstadt Professor of Marketing at Emory.

To answer could require writing a book – which is exactly what Sheth did.  In The Self-Destructive Habits of Good Companies...And How to Break Them (2007), he argues that as companies "do well," they acquire bad habits. For some, success breeds complacency.  For others, success creates internal power struggles that lead to dysfunction.  Still others become caught in what Sheth calls "competitive myopia" – when a company spends so much time thinking about one or two competitors that it fails to identify up-and-coming challengers.  Sheth's book identifies seven self-destructive habits of good companies and outlines strategies for leaders to intervene effectively.

In his writing, teaching, and his scholarship of practice, Sheth draws from decades of experience working across disciplines to produce new knowledge. His research ranges from marketing theory to cultures of globalization, from human psychology to demographics and global competitive strategies.  He co-authored The Theory of Buyer Behavior (1969), widely regarded as the foundation of marketing theory.  He is the founder of the Center for Relationship Marketing at Emory's Goizueta Business School.  In 2005, he founded the India, China and America (ICA) Institute, a non-profit organization that seeks a sustainable platform for business relationships among the three nations. In March 2007, ICA will hold an international conference at Emory on "Education for Innovation in India, China, and America."

At Emory and beyond, Sheth is a leader in international business for the twenty-first century.  His latest work targets the rise of China and India – or "Chindia" – and its impact on world business and culture. "We are going to experience what I call the Easternization of the world," Sheth says.  In the UK, for example, the most popular convenience food is now Indian curry, which has replaced traditional fish-and-chips.  The trend toward adopting Eastern traditions in food, shelter, and clothing represents just the tip of the iceberg for what Sheth describes as the "Asia-centric century."  And the effects of Chindia, he says, will be felt in both business and cultural arenas.

In the business arena, China and India will become serious competitors with the West. Chinese businesses such as Haier already are making strides against American giants General Electric and Whirlpool. Indian companies are undertaking massive acquisitions outside the country, producing such powerhouses as Mittal Steel, now the largest steel conglomerate in the world, and India-based Tata Tea, second only to Lipton in the world tea market after acquiring Tetley Tea.  And at the same time that China and India become formidable competitors, they also will open up their domestic consumer markets.  These markets, however, will be filled with people below the poverty line.  As a result, companies from all over the world will race to make existing technologies more affordable.

This trend toward affordability is already happening.  In 2008, for example, Indian company Tata Motors will introduce a car in the UK that costs just $2000.  Technology companies across the world are working to create computers that cost less than $100 and cell phones that retail at less than $35 without any subsidy from the service operators.  Competing for Chindia's vast consumer base, Sheth says, will mean finding innovative ways to make cars, computers, and other technologies much less expensive.

The rise of Chindia also poses cultural and environmental challenges.  Both countries will require massive amounts of natural resources.  But Sheth predicts that the "Asia-centric century" will see cooperation and sustainability, not environmental degradation. Countries will recognize that they must work together.  They will engage in bilateral partnering to obtain oil, agricultural resources, and other materials.  They will resist military conflict and pursue collaborative relationships.  And the scarcity of natural resources will encourage technological innovation. The leading companies of the twenty-first century, Sheth says, will be those that figure out how to substitute factory-made resources for natural ones. "Who says oil can only be made by Mother Nature?"

To survive and thrive in this climate, Sheth says, Americans will need to capitalize on their unique culture of innovation and entrepreneurship.  "It's in this country's DNA to be innovators and entrepreneurial," he says.  American businesses must vacate markets in which they can no longer compete effectively.  Then they should create altogether new industries in areas where a deep knowledge base already exists – in the biological sciences and health care, for example.  This is what the United States did in the past with the inventions of television and cell phones.

At Emory, Sheth encourages a culture of fresh thinking and entrepreneurship among his students.  His M.B.A. marketing seminar focuses on demographic trends that affect the practice of marketing – including the growing numbers of women in the workplace, the decline of the middle class, the rising ethnic population, and the aging of America.  Sheth also works with Ph.D. students in the fields of marketing theory, global competitive strategy, and relationship marketing. In February 2007 Sheth delivered the twelfth annual Distinguished Faculty Lecture, "Climate, Culture, and Consumption: Connecting the Dots," the only university-wide opportunity for Emory faculty members to honor the outstanding teaching and scholarship of one of their own.

Sheth's scholarship complements the vision of Emory as an ethically engaged university.  He strives to balance the demands of business with the ideals of social ethics.  He says he is optimistic about Chindia's effect on capitalism. "We're going to see more compassionate capitalism," he says. "Eastern businesses will help Western ones learn to 'do well while doing good.'"  Where that adage is concerned, Sheth himself sets a fine example.