Why is international trade growing?
What are the issues involved with international trade?
How can you become more successful in international trade?
Why is international trade growing?
Internationalization/Globalization has arrived as the major challenge facing enterprises in their quest not only for growth but, sometimes, for survival. All countries and companies are or will soon be competing in the international marketplace. International business is exploding. Nations have traded with each other for thousands of years, however, the volume of international trading is increasing dramatically. The amount of trade went from US $ 200 billion to over US $ 4 trillion in 1990. In the United States, just as in Europe, Asia and the rest of the world an ever increasing number of firms of all sizes are going international and an increasing percentage of their total revenues is coming from international trade.
What are the issues involved in international trade?
Firms that want to participate in international trading must understand the culture, costumes and values of the country(ies) where they wish to operate. Key issues and factors for success must be identified and evaluated.. Management style must be adapted to local costumes and values. Cultural differences must be understood and bridged. "Cultural sensitivity " and an "International frame of mind" are necessary.and must be developed. Contact with the headquarters and eventual subsidiaries in other countries must be maintained at a high level of effectiveness. Relationships with the local and national government officials must be created, strengthened and, above all, maintained with high ethical standards. Mutual trust must be developed before significant accomplishments can be achieved. Social and political developments in the country (ies) of operation must be monitored and carefully evaluated for their impact on business.
Last, but not least, economicity of operation must be achieved, then maintained and profits generated reinvested or transferred elsewhere.
How can you become more successful in international trade?
To be successful, a firm must act appropriately in the country of operation through empowering of managers to think internationally and act locally and appropriately. Such include openness, often relying on intuition, being flexible, watching and listening carefully, tuning to the social situation around them, following and adapting to the flow of people and events, evaluating each situation on its own merits. Unfortunately, such management style is often given less prominence in the US, where the focus on making decision is mostly based on quantifiable facts, control of patterns of behavior, rational situation analysis, establishing and implementing strict rules and guidelines, and paying less sensitivity to employees as well as customers. Therefore, managers who are very successful in a typical US enterprise may not be able to perform as required to successfully start and manage an international operation. At this critical stage, employing skilled personnel, technically proficient in the areas of operations, familiar with uses and costumes of the country of operation, and experienced in bridging the cultural differences between people of different national background may make the difference between success and failure.
This Web Page Was Last Updated on May 10, 2000