Discussing the international environment for business performance is a
fascinating activity. You hear so much and you keep learning about various
developments and setbacks, successes and blunders made by the various
players in the field. Businesses have been known to make the same mistakes
over and over again, even though these mistakes could have been easily
avoided by a brief examination of to-doÆs and to-donÆts.
In a session that looked into the legal issues of international marketing my
students and I agreed on the fact that doing international business requires
an awareness of the rules and regulations of your home country, the target
market, and the relationships between your country and the one you intend to
do business in.
By now it has become clear that exporting from the United States is pretty
cumbersome and therefore discouraging to every business organization that
wants to explore foreign markets. You are not just required to find out
whether your product can be exported, which depends on whether it can be
seen as a mere consumer good or as a military object as well, but you also
have to consider the country that you want to export to, subsequently: the
company you will do business with, and last but not least: the purpose of
use for this product in the target market. Those are four hurdles in a row:
all extremely time- and effort consuming, none of which are favorite issues
for a business.
We came to the insight in this session that, although governments worldwide
try to stay out of export dealings as much as possible, because they see
exporting as a positive development for their annual balance, the United
States has a somewhat different perspective: instead of decreasing its
interference in export-matters, the government has decided to increase its
involvement since September 11, 2001. This is understandable on one hand,
but it definitely complicates matters and makes them even less attractive
from a pure business perspective.
And then thereÆs import control: the set of rules and regulations
implemented by governments for a multitude of reasons, some of which are:
protection of the local production, or the process of boycotting products
originating from a country that the home country has less friendly ties
with. In this series of articles it has been stated before that the only
group that is really suffering from import controls is the guild of
consumers, because they will have to put up with lower quality (a local
producer that does not fear international competition will be less
challenged to keep up with global requirements), higher prices, and less
choice.
Gradually, the international involvement of all countries in the world is
progressing in some regards, though. One of them is the perception of
anti-trust laws, which used to be very stern in the United States. Since
this country has since realized that in, for instance, Japan, the only way
to be successful in business is to link up with other producers and form
consortia, the rules are in process of reconsideration. And so, too, the
issue of bribery, which will be elaborated on in a section hereafter.
In this session of studying the legal environments in the domestic- and
international markets, my students came up with three crucial insights:
1. Bribery may not be morally seen as right, but you cannot get around it in
some countries. Fortunately, it is now better understood that in some
countries you just wonÆt get anywhere without paying a little fee here and
there. Since that is currently seen as an established fact, the U.S. has
created certain criteria where at least some U.S. business performance in
certain environments is enabled.
2. Barriers to trade may not be a solution in the relationships between
countries: on the contrary! Barriers to trade create an unfriendly
atmosphere between countries, and all the hassle this brings along may not
even result in any impact, since there are always other countries in the
world that can provide similar services as the one establishing the barrier.
The only way, thus, to make sure that trade barriers work, is to form a
coalition among all countries that produce a certain good, and cease
exporting to that particular country.
3. The U.S. tendency to litigate makes doing business in this country
unattractive for international business organizations. All the liability
insurances and legal departments that need to be maintained in order to deal
with lawsuits increase operating costs, and place organizations in an
unfavorable competitive position.
Yes, it is interesting indeed to find out about the totality of rules and
regulations, and especially the creative solutions countries find to
established barriers.
These are some of the things you should be aware of, even if you are not
involved in international marketing. The day that you will want to purchase
a product from a company located in another country may be nearer than you
thinkà
Joan Marques, Burbank, September 22, 2003
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About the Author:
Joan Marques, holds an MBA, is a doctoral candidate in Organizational
Leadership, and a university instructor in Business and Management in
Burbank, California. You may visit her web site at www.joanmarques.com
Joan's manual "Feel Good About Yourself," a six part series to get you over
the bumps in life and onto success, can be purchased and downloaded at:
http://www.non-books.com/FeelGoodSeries.html
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