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New Zealand Tour Becomes Spring Break Classroom

(This article appeared in Stanford Business Magazine in December 1988.)

It all started with Professor Steve Brandt, who has consulted for a variety of New Zealand firms. "If you want to see a dramatic example of government affecting a country's ability to compete economically, you've got to check out New Zealand."

Because the role of governments in enhancing international competitiveness was exactly what the Public Management Initiative for 1987-88 was all about, we were interested. The Initiative was Dean Jim Patell's brainchild, a way of annually injecting more excitement into the Public Management Program while recognizing that the GSB is a business school with a public management thrust, not a full-service public policy school.

A personal encounter with Kiwi business and government leaders seemed an ideal way to capture the excitement inherent in the collision of public policy and market forces. So during spring break, 16 Business School students and faculty took a firsthand look at New Zealand.

New Zealand was the first country to enact a "cradle to grave" welfare system. It lived "high on the sheep's back" for decades as a well-reimbursed farm province of Great Britain. (There still are 70 million sheep and only 3 million people.) In the 1950s, New Zealand enjoyed the fourth highest standard of living in the world ' Ironically, this occurred under the conservative National Party that had governed for decades on the Labour Party's national platform.

In 1963 Great Britain joined the Common Market and reduced its agricultural imports from New Zealand. Over time the cost of a subsidized economy and a welfare state came to take a toll. David Lange's Labour government came to power in 1984 and set about creating an environment in which New Zealand companies could (and would be forced to) compete.

First Impressions
The thing that strikes us quickly about New Zealand is how small and accessible the country seems compared to the United States. Everyone we talk with seems to have met with Prime Minister Lange "just last week" when he came to their offices.

We meet with Norm Geary (Sloan '75), CEO of Air New Zealand, on Monday. Tuesday he is quoted on the front page of the Auckland newspaper. Wednesday afternoon we talk with Finance Minister Roger Douglas about Geary's criticism of the government's opening of the domestic airline market to an Australian carrier without negotiating reciprocal rights for Air New Zealand. Wednesday evening we dine at Bank of New Zealand, headed by Bob McCay (SEP '83). We ask about the opposition party and immediately receive an offer to arrange a meeting with Ruth Richardson, leader of the National Party opposition.

Roger Douglas, mastermind of "Rogernomics," is the man of the moment. I am reminded of how people in Washington, D.C., were obsessed with David Stockman in the early months of the first Reagan administration. Douglas is clearly in control and, given the parliamentary system, will be until the 1990 elections, unless the "back benchers" in his own party rebel. In response to a criticism that he may be moving too fast, he goodnaturedly reads a passage from his own autobiography about the inability of academicians to ever take any action. "When I see a window of opportunity, I don't stand around. I drive a truck through it!!!"

Douglas is emphatic about the need for "everyone to suffer equally" or his government's mandate for change will fade. But those most harmed by side effects of Rogernomics are the native Maori people who have filled many of the disappearing jobs in the bottom half of the economy. We spend Thursday afternoon and evening in the village of Otaki at the Maori Marae, the physical center for their cultural and community activities.

Maori Meeting
The Maori center is a different world, where time slows down. It is six hours before we even begin talking about the subject of our visit. Well after dark, we gather in a long dorm-like room with mattresses on the floor to hear the Maori view on Rogernomics. Our host, a Maori leader who is an accountancy professor at Victoria University, tells us to stretch out and relax. "It's not your responsibility to stay awake. It's the speaker's responsibility to keep you interested enough to stay awake."

Friday we head to the Southern island to visit an MBA class at Canterbury University in Christchurch. The class has a visitor, the CEO of Smiths City Market, the firm that was highlighted as the outstanding New Zealand company in Theory K (a Kiwi version of In Search of Excellence).

After a weekend of recreation and relaxation with our host families in Christchurch, we board the plane home. Conversation revolves around the lessons learned. There is consensus that intellectual excitement abounds in the clash of public policy and market forces. There is appreciation (and suspicion) for a form of government that seems to grant an elected administration a true mandate to determine the country's future direction. There is disagreement about the ability of Roger Douglas to carry out his plans, and the desirability of his doing so. There is concern for the fate of the Maori as a cultural entity. And there is deep appreciation for the many Kiwis who helped make our trip a memorable one.

—by James C. Thompson, MBA '86