Truly Encouraging

The first lecture was given by Ms. Hulle, presenting on corporate
governance. In her lecture, Ms. Hulle talked about corporate
governance, which is the structure of the top of the organization. She
emphasized that the main problem is there is nobody to monitor the
hierarchal boss. In the States, the ownership of the companies is
dispersed, which leads to the potential threat of the CEO becoming too
powerful. Ms. Hulle emphasized in Europe it is different. Unlike the
States, Europe has holding companies, which buys junks of stocks to
control companies. The current trend in Europe is the holding companies
breaking down gradually. 

She also talked about accounting, where Europe has different accounting
standards. She said that there are two roles of accounting: reporting
and the purpose of taxing. We learned that since Europe has only one
book, they have a consolidation issue problem. There is an old saying
in Europe companies, “When you talk about profits, you are tired of
them”. Companies tend to hide information on profit in Europe, so the
accounting role of taxing is not satisfied.

The second lecture of the day was on Discounters in Europe and it was given
by Professor Dr. Marnik G. Dekimpe .  In his lecture, Dr. Dekimpe
talked about how powerful discounters are in Europe compared to the
US.  Discounters are private labels that are put into the market,
comparable to generic brands or store brands.  In the US, only 20% of
total sales are of private labels.  In Belgium, the number is 35%.  In
Switzerland it is as high as 45%.  We learned that private labels come
from two areas.  Private labels come from small local players and
national brands.  Small players are local producers that give
supermarkets their products to sell locally.  National brands produce
generic products that are exactly the same as the brand names.  This
way they can market to the lower levels of the population.  We learned
that Aldi is a very popular organization in Europe as well as in the
US.  However unlike the supermarkets which have around 13,000 products,
Aldi only has 900 products per store.  In Germany, Aldi is the market
sharing leader of computers, bikes, and artwork.  In Europe, consumers
will buy up to 40% of supermarket goods on promotion.  This information
shows that European consumers are not worried about brand names as much
as consumers are in the US.

That afternoon, we got on a bus to Brussels to visit Minister Consular
Norval Francis at the US Embassy.  Passing through security, some of us
had to bite our tongues in case any humorous remarks about bombs or
George W. slipped out.  Luckily, no one was frisked and we passed
through undamaged. 

Mr. Francis gave us a warm welcome, candidly introducing us to the
problematic structure of the EU with the comment that while embassies
are sent to countries and missions are sent to organizations, he is not
sure which one he represents, so complex is the EU.  He also told us
that in order to join the foreign agricultural service, we did not need
an agricultural background.

It was interesting to see how the EU is organized: 25 member countries
send in 700 directly elected representatives to the EU Parliament, 25
appointed commissioners.  The EU is now the largest consumer power in
the world with ½ billion consumers, but Mr. Francis told us, one of the
largest problems is harmonization across countries of rules that
protect these consumers.  Specifically, he stressed food safety
issues.  The FSA, or the European food safety, separates risk
evaluation and risk mitigation, and, as Mr. Francis reported, has
rather alarmist reactions to food scares.  The EU in general, in fact,
tends to pass regulations on food safety without much regard to
consequences.  When asked why, Mr. Francis told us that a few decades
ago, there was a scandal over BSE (mad cow disease) and HIV in the
blood supply, which made the general public distrust the government
researchers.  Lastly, he told us that the EU was hoping to bring the
way it regulates such issues to the world. 

After saying goodbye to Mr. Francis, we walked around Brussels, taking in
sights like the palace and the EU parliament before returning to De
Warande for a very, very posh reception with the Baron von Wienberg and
various alumni of the University of Illinois.  Because we had some
extra time, Dean Robert Easter and Vice Chancellor Jesse Delia came to
talk to us about the incredible changes in business and society in
China.  Takeaway: watch China’s expansion in the next few years!

The reception was incredible, not only because of the free bar and
incredible salmon mousse, pate, and mussels, but because it was great
to see how University of Illinois alumni ended up in a city like
Brussels!  It was all topped off with a speech the Baron made and
having people like him supporting our knowledge of the world was truly
encouraging. 

After the reception, we bade farewell to our newfound friends and went off in
search of dinner.  Brussels had a great selection of ethnic foods,
especially Greek food, which is what we chose to eat.  Needless to say,
eating gyros and listening to the local accordian player serenade us
with his version of the chicken dance was an unforgettable experience. 

Signing off from a long, long day:

Ryan Anderson, Paul Chang, Jajah Wu

Posted by Milind Basole