Internationalization poses a significant challenge for Taiwanese companies seeking a global presence. The public missteps of TSMC underscore that even the most reputable Taiwanese firms can struggle when managing foreign talent.

In response to an invitation from Acer founder Stan Shih, Thunderbird Business School's Dean, Sanjeev Khagram, visited Taiwan in July. He introduced the Taiwan Going Global Initiative, designed to support Taiwanese companies in successfully navigating internationalization.

Thunderbird Business School, located in Arizona, US, was established 77 years ago by a WWII veteran. The intention was to educate young Americans in international business, encapsulated by the ethos, "borders frequented by trade seldom need soldiers." The school proudly holds the number 1 position in the QS International Trade Ranking for 2023.

Having guided numerous generations of American leaders in their international business endeavors, Khagram offers a unique insight into TSMC's challenges in Arizona. While some argue that globalization is a relic of the past, Khagram firmly asserts, "globalization is far from dead; it's merely recalibrating."

Every Taiwanese graduate from Thunderbird last year now works at TSMC. The school anticipates a tenfold increase in enrollment from the region in the forthcoming years. What follows is an interview excerpt with Khagram.

CommonWealth (CW): How is TSMC doing in the US?

Dr. Sanjeev Khagram (Khagram): We're just beginning our relationship with them. It's an incredibly complex environment that they're coming into. The United States has transformed dramatically over the last decade. It's a polarized society and Arizona is one of the most complicated political, cultural contexts in the United States. 

They chose Arizona for many good reasons. It’s a desert, which is good for fabrication. It is a growing economy with lots of talent. We are a part of Arizona State University and we produce 40,000 engineers a year. So it’s a very favorable business environment. The major challenges, of course, are cultural.  

Cultures are not static. They change over time, but you know, there are certain cultural norms that are accepted. If you look at the culture data on Taiwan relative to the US, they're very different in performance orientation and hierarchical decision-making. 

Also, TSMC is the premier company in Taiwan, they're used to being able to make decisions and being seen as the best, but in the US, very few people even know who TSMC is, or where Taiwan is. So there's just a lot of work to be done, not just the workers, but citizens, government officials, stakeholders' understanding of Taiwan, of TSMC, and of the semiconductor industry, all of which takes time. 

CW: That’s a lot of communications work, how are they progressing?

Khagram: Back then, they had to make a decision very quickly, and it was a massive investment with a lot of pressure to deliver. So there's a lot of learning going on, it’s where we're hoping to bring our experience. 

I also want to take a step back and say, heavy tech industry globalization is a very unique and different thing, compared to the consumer industry, it requires a high level of technical proficiency to produce a very disciplined product, all of these things represent a whole set of challenges. You also have to consider semiconductors is such a politically charged sector, so there's a lot more complex political dynamics going on. TSMC is taking on a lot at the same time. 

To start from the very basics, there's a big focus, rightfully, to learn English, but the focus has largely been on the technical language. In fact, to be a manager, it's not just the technical side, it's actually the cultural understanding, the cues, what certain terms mean, the body language, and it takes time to understand that. 

But I want to reinforce, it's not just a one-way street. It's not just from TSMC and the Taiwanese professionals that are moving to Arizona. The American employees need to understand and recognize they're part of a Taiwanese company.  So it’s not just the Taiwanese undergoing cultural acclimatization, you're also helping the Arizonians to understand Taiwanese culture. 

In our conversations, it's clear that people at TSMC spent little time focusing on the American employees and helping them understand how to work with Taiwanese management and the TSMC culture. Virtually any major company of that size and success is going to have a very strong culture and any employee that joins that company has to become a part of that culture. 

Americans have a completely different orientation. So how do they select employees from the US who have a sensibility or willingness to be open to a different culture, a different way of doing things? Obviously there's very high-level, specific technical talent that TSMC needs in the US which we don't have yet. So that's part of the challenges too.