September 30, 2014
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Cultural Strategies

University of Evansville business and engineering students share ideas and develop plans for small businesses in Mongolia
Students Phoebe Hodina and Jyl Loehr at the Zaisan Memorial, which overlooks the entire city of Ulaanbaatar.

After two years of planning, eight University of Evansville business and engineering seniors traveled to Ulaanbaatar, Mongolia, in August to work with G.O. Ministries, a nonprofit organization that works in developing countries to provide aid to those in need.

In Mongolia, G.O. Ministries’ focus is to free women from a growing sex trade and to help young men with alcohol addiction. The students acted as consultants, bringing business knowledge and engineering skills to the organization. The business students worked with the nonprofit to generate business plans and implement strategies for a small jewelry business, Streams in the Desert, which hires, trains, and provides spiritual guidance for women on the streets of Ulaanbaatar. The engineering students collected data to determine if a Soviet-era building can be renovated, and are to generate plans for a Greenfield project that would house a new dormitory for the mission, as well as retail space and a training facility. The student groups will use the information gathered in Mongolia as the basis for their senior projects. The following is from my personal journal during the trip.

Through our research prior to the trip, we learned that Mongolia has about 3 million people (about 1.5 concentrated in Ulaanbaatar, the capital city), more than 40 million livestock, and access to minerals in their now burgeoning mining industry. It was intriguing for us to visit a country with great potential and access to natural resources, while realizing the enormity of the challenges the country faces.

Throughout our trip this August, we conducted data-collection about the business practices and cultural aspects of Mongolia. I was accompanied by my peers Kyle Tiemann of Indianapolis and Jyl Loehr of Holland, Ind., both accounting students, and Catherine Albers of Freeburg, Ill., a management and marketing student, as well as four engineers; two civil (Chris West of Indianapolis and Katelyn Spainhour of Floyds Knobs, Ind.) and two mechanical (Kevin Ulrich of Chugiak, Alaska, and Matthew Preble of Weatherford, Texas). Our team was led by faculty from the business and engineering department, Peter Sherman, Ph.D., and John Layer, Ph.D. We were also joined by Jerry Woodcox, the head of operations at G.O. Ministries and Reid Olson, an Emmy Award-winning videographer employed by G.O. Ministries.

Upon our arrival in Mongolia, we stared out the window of the airplane. On the dirt jet-way, we noticed jetliners parked in the grass alongside the strip. We all wondered: “What have we gotten ourselves into?” Driving into the city, wonder gave way to panic as our driver weaved around potholes, plowed through red lights, and ignored traffic lanes and all road rules. We later learned Mongols have a very nomadic mindset, even in the city. John Koehler, a missionary from G.O. Ministries who has lived in Mongolia for 10 years, remarked, “If there is a rule, a Mongol will find a way to break it.” He explained that there just aren’t a lot of rulebooks to follow in nomadic lifestyles, so when Mongols move inside a city, procedures tend to go unnoticed. This feeling extends into basic business practices, where it is common to keep two sets of books, as taught in accounting universities. For many of the local vendors, tax evasion is expected of businesses. And so, we began to learn about business in Mongolia.

Our first meeting was with Bill Manley, an entrepreneur from the U.K. who helped explain the local business climate and the position of Streams in the Desert. Bill and his wife describe themselves as nomads, having lived all over the world. They have spent the last nine years building a Fair Trade business in Mongolia, grossing more than a million in revenue last year. His store, Mary & Martha, is the only certified Fair Trade store in Mongolia, which welcomes about 300,000 tourists annually. Bill taught us that Mongols have a very strong “profit now” mentality. His illustration is the recent expansions of the mining industry, where many mining executives order cheaper, low-quality tires that quickly wear out, rather than invest in longer-lasting, more expensive tires. The company ends up spending more money because they don’t see the value in strategic investments. Within his own business, Bill is challenged by his local artisans, many of whom work and live in the countryside and are nearly impossible to reach. Many Mongols commonly find it difficult to understand deadlines or the importance of planning ahead. Bill has to remind them to do things like purchase materials in advance and plan for large orders. Our group began to draw conclusions about a possible lack of work ethic, prevalent in the country, causing frustration for entrepreneurs.

In our meetings with Streams in the Desert, we found similar issues, as the company found it difficult to get many of their women to show up every day for work. They cannot fire the women for absenteeism since it would defeat their mission of helping them, and the women would wind up back on the streets. At this point, we began to see opportunities to outline worker incentive programs crafted to increase the consistency of Steams’ workforce. Finally, we begin to see where we can help.

Further into our meetings with Streams, we uncovered more work. We sat down with Koehler and did a thorough analysis of the business model. We were hoping to identify opportunities where they could improve processes and distribution channels to make the business run more profitably and smoothly. We identified the area of accounting as an area where improvement could be easily implemented. Previously, the accounting was performed using a rudimentary combination of spreadsheets and word documents, which prevented the business from knowing if it was even profitable.

Accounting students Kyle and Jyl worked with Liz Sedore, a social worker and coordinator of the program, to uncover the inefficiencies in the inventory system. Kyle and Jyl recommended the use of accounting software and offered to train Liz on how to use it efficiently.

While the accounting group makes progress, Cat and I sat with Belgee (pronounced “Bell-Gay” and short for Ulziibayar Belegsaikhan), a Mongolian citizen, who is a real spitfire, speaks good English, and has the most ambition of any local we’d met. Belgee seems to have more business ideas than she has time for, and we appreciated her enthusiasm to expand Steams’ operations. Belgee seems to think there is a potential market for a laundry business. Cat and I discuss the possibilities with her, and plan to outline a business plan for the jewelry and laundry business throughout the semester. Belgee needs help with promotions, pricing, time management, and understanding financing. The women who run the business are social workers, and there is a definite need for a business manager to help them with the operations.

This fact is increasingly obvious to us. We realized a need for some succession strategies given the significant turnover for expats that are running the program. While there is a sense of community around these people, they have left their families and loved ones at home to be in Mongolia. Should these individuals (John and Liz) decide that they need to be home, Streams in the Desert would crumble. It is crucial that we plan for this.

As our trip draws to a close, we realized, amongst the beautiful countryside with sprawling mountains, lays a city in a valley that is very much in need of help. Skills are needed, a work ethic must be learned, and the value of a long-term investment strategy must be taught in an unstable business environment with a nomadic mindset and evidence of a bribery-engrained culture. If both Streams in the Desert and the country can’t compete, they are likely to be left behind.

Phoebe Hodina is a Bloomington, Ind., native and University of Evansville senior majoring in business administration with concentrations in marketing and finance. She maintains high academic standards as a dean’s list student while balancing the lifestyle of a NCAA Division I athlete as a member of the Ace’s swim team. Phoebe has studied abroad three times in Harlaxton, China, and Mongolia. She is actively involved on her campus as an officer in Chi Omega, and in the community through her current marketing internship at Atlas World Group.

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