- Trade theories leading to the recent rise of China and India on the global stage.
China and India are two Asian giants who have in recent decades become leaders in global trade and economy. The last few decades have seen the two rise to share a table with the worlds top trading and economic powerhouses. The success has been largely due to the following reasons.
Absolute Advantage.
The two countries have big land masses and are endowed with a vast range of natural resources and minerals. This means their industries can source for raw materials inside the countries. They don’t need to export from outside hence making their raw materials competitively cheap.
The big populations in the two countries means that there is readily available, cheap labor-force to run their factories. This cuts the cost of imported labor which tends to be expensive and more demanding than local labor.
The above two factors combined contribute to low cost of production which in turn translates to the two countries having an absolute advantage over other countries whose labor and raw materials costs are high in comparison. This means that the two countries can sell their products at cheaper prices hence gaining competitive advantage over their global counterparts.
Theory of Liberalization of industry.
Both countries have put in place legislation that eases rules and procedures entrepreneurs should follow while opening new factories and running established ones. This has been done through minimizing the number of licenses, levies and other government duties that hinder the opening of new factories.
Entrepreneurs from outside are also encouraged to invest in setting up their brands inside the two countries by been offered tax reliefs and other incentives as well a guarantee of cheap labor.
2. Name four elements of culture and indicate why they are important when marketing products abroad.
Keeping of time and been punctual.
Different cultures have a different way on how they value keeping time and been punctual. In some
cultures like Africa and some parts of Europe and America, been slightly late for an appointment with a client can be excused while in other cultures like Japan, been late for a business meeting can mean lack of respect to that client’s timetable and may lead to loss of a business opportunity.
In whichever culture a company is operating from, it is always prudent to ensure you keep time. This shows you value the meeting and creates a positive start to future engagements with the client.
Cultural norms and practices.
Cultural business norms vary from one country to another. In cultures like Japanese, business meetings are led by the senior most person and the juniors may never get to speak at all. In the middle eastern cultures, it is a taboo to give out alcohol during business meetings whereas in Europe and America, it is a normal standard practice to toast with a drink after a successful meeting has been concluded. Islamic cultures frown on physical contact between men and women unless she extends her hand first.
Companies should learn the cultures of their host countries to avoid upsetting a client and losing business from them.
Language.
Different cultures have different languages with which they use to communicate. This means that a successful marketing campaign must aim to perfectly communicate in the local language of the host country in countries where English is not the first language. Companies must engage with local linguistic experts to help them in shaping their marketing adverts and messages in such a way to capture the imagination o the local population and say them to buy their products.
Values.
Some cultures value the extended family unit while others have preference for the nuclear family unit. In America for instance, consumers tend to make purchasing decisions based on personal preferences while in far east, the extended family unit is considered more when making purchases. Companies should aim their marketing message on the preferences of the target market s as to catch their attention.
3. Managerial decisions in foreign countries driven by cultural factors.
When a company opens up in a different country with different cultural beliefs and practices, it means the manger in charge may have to make some decisions that are not the norm in the company’s parent country. Most of these decisions are largely altered from the company’s standard practice so as to accommodate the host country’s cultural sensitivities.
Rest days and holidays.
Most companies in Christian based countries usually close for business on Sundays as they follow the Christian calendar. But when a company opens up subsidiaries in a country that is not dominantly Christian, the manager may have to change the rest day to reflect the host country’s preference.
Other countries like china have their new year anchored on February and celebrated for a whole week. This means that a manager of a foreign company with a branch in china may have to arrange new year holidays for their staff members and clients during that period to avoid conflicting with their hosts.
Change of advertising methods and message.
Some countries have a host of sensibilities that managers have to contend with as they advertise and market their products in those countries. In china for instance, it is taboo to do adverts or movies that depict some animals like Pandya, dragon and others in a bad light. In japan, the number four is considered unlucky so all adverts should avoid any mention of that number to avoid upsetting the targeted market. Managers have to plan the company’s advertising and marketing message in such a way it flows with the various sensibilities to avoid backlash.
In countries where English is not the first or second languages or where the population is semi illiterate, managers have to design adverts and marketing messages in form of pictures and audio so as to catch the audience’s attention.
Staffing and gender considerations.
In Muslim countries where women are not supposed to physically make contact with men, the manager may opt to staff only males in departments whose operations require group physical handling of products or machines. For instance, in factories where the nature of work demands physical handling of equipment and arranging and packaging of finished products, the manager may be forced to hire men only due to the high frequency of physical contact by the workmen.
4. Why criminal laws vary from one country to another.
Criminal laws differ very much in the way they are applied in different countries. A criminal offense committed in one country may attract a heavier sentencing than if it was committed in another country. In some countries, the same offense may not be considered an offense at all.
History.
The history of a country, how past events have affected the trajectory of the country’s future, shapes how criminal laws of that country will be defined. The USA, has a history of citizens taking up fire arms to protect themselves and rise against the British protectorate. Owning a fire arm is therefore every citizen’s right and one can just walk into a gun shop and purchase one with few restrictions. In African countries, guns are only issued to the disciplined forces and a few licensed citizens who have to be vetted and approved by the police who issue licenses at their own discretion.
Social Dynamics.
The social dynamics of a country determines how it will enact laws that touch on the it’s dynamic societal practices. In India, there is a general practice of men been demeaning and disrespectful to their women. This has led to many reported rape cases not been investigated leading to poor prosecution and eventually rape offenders been let off the hook. But in most western countries, rape cases are taken seriously and thorough investigations lead to guilty verdicts. This is because the country’s female population rose up and demanded for laws to protect them.
Economic dynamics.
There are countries which have enacted very strict laws for offences that negatively affect their economies. In china, anyone caught committing economic crimes given heavy, detrimental sentences. Offences like bribery and corruption are harshly punished so as to act as a deterrence.
5. Would companies eliminate financial scandals if they establish ethics codes?
Ethics codes are rules and guidelines that a company establishes for all its employees to follow in order to ensure smooth running of their company’s day to day activities. These rules vary from one company to another and touch how employees from the company’s different hierarchies should relate and communicate with each other on company matters, dos and don’ts of every employee as they fulfill their duties in the company and lastly how the employees should related with clients, marketers and suppliers outside the company. Ethics codes help the company in moving towards achieving its goals and objectives. It ensures that every staff member knows what is expected of them and the punishment they are bound to face if they don’t adhere to the guidelines.
Corporate ethics rules that touch on dishonesty and how to manage the company’s finances helps to reduce incidents of pilfering of company coffers. Tight guidelines should be set on how revenue generated by the company is to be used and the procedures to be followed. This ensures there is transparency and accountability as only staff members who are responsible for handling the finances are allowed to do so. That way, in case of misappropriation of the funds, the person responsible can be easily identified and punished accordingly.
Therefore, it is prudent to note that as much as ethics code of conduct can drastically reduce cases of financial misappropriation, it can never completely eliminate the vice. There will always be that staff member who despite all the checks, will be inclined to dip their fingers in the company’s coffers. What is important to note is that as long as a company has a watertight code of ethics rules, any staff member who attempts to steal company funds will be found out in due course and punished accordingly. This acts to deter other staff members who may be having similar intentions to desist or risk getting caught and punished.