American Principles as a Catalyst for International Investment

America was founded on a mere idea of opportunity that enticed thousands of people across the soapy seas to nail down new entrepreneurial stakes in the fragile colonies. Blacksmiths, carpenters and farmers spread out to start new businesses to feed their needy families. Even in a global economy the entrepreneurial spirit embedded within our American values has market appeal that can be converted to investment value.

Life, liberty and pursuit of happiness are based on trust. People believe that when they put a dollar in the bank it will be there a few days later, they are charged the price posted for products, hard work still results in increases in wealth, and education opens new doors. Trust glues societal fabric between people, employees-employer, investor-executive, citizen-government, and civilian-law enforcement.

When the fundamentals of trust break down so does the economy. The microeconomic transactions that occur throughout the nation are founded on simple ideas of value and confidence in the future. The dollar is the measure of that trust and is exchanged in good faith among economic elements to complete transactions.

Trust applies to foreign investment as much as it does to domestic commerce. Multinational companies spend a lot of time trying to understand the political and economic nature of nations to make investment decisions. Political instability and mistrust raise the risks of investments that ultimately result in sparser economic wealth generation.

Companies invest in places where the political, cultural, and economic spheres show enough stability to help ensure that their investments will have value in the foreseeable future. Increasing investment and heightened economic activity is one sign of increasing levels of trust. Investors believe that their opportunities are safe and growing.

Laws and values come to define the health of the system. Where laws encourage entrepreneurial activity and protect the rights of people socio-economic assumptions form. It is those assumptions that filter throughout the decision-making lenses that lead people to engage the market at higher levels.

In countries where there are political instability and inconsistent application of laws, you find that economic activity declines. Not only do companies under perform the market, but the countries find themselves in competitively weaker positions as people either disengage from the market or move into the black market.

America is changing and opportunities to build a better society abound if we ensure that trust is created in society. Founding principles applied consistently across our country prompts engagement and stability in the market that is attractive to international investors. Nation building has entered a new era of exploring the power of the human mind and funneling that through our American lens to create greater investment and economic activity.

Is the Standardization of International Business Curriculum Around the Corner?

International business curriculum is on its way and may someday be a standard by which universities judge themselves. As the world integrates and international workers gather around needed knowledge sets international business curriculum will become more common. A paper in the International Journal of Social Sciences & Education begins to discuss their evaluation of accreditation bodies (Nzeh, 2014).

International businesses are common and seek qualified talent that can effectively work in cross-border commerce. Up until this points most business schools focused on curriculum that was national in orientation and represented the needs of local stakeholders. As the nature of international commerce and employment changes so will the educational process that meets those needs.

According to the authors a review of business school accrediting bodies such as ACBSP, AACSB, and IACBE found that many of them contain similarities of themes that set a foundation for standardized international business curriculum. Other accrediting agencies in Europe and Asia also share foundational similarities with American accreditation agencies.

Knowledge doesn’t exist in a bottle and curriculum from different localities borrow from each other to generate market relevancy. As the needs of international business become easier to define and online education grows there will be a subtle push toward standardization. Such standardization is likely to be formal but could work equally well on an informal basis.

There will be certain underlying needs of international businesses that will apply to equally to each of them. International students may need additional training in systems thinking, multicultural communication, and international management but don’t often get these skills from local colleges. Developing international curriculum helps ensure that the global mindset is created among new recruits.

Nzeh, O. (2014). The new paradigm shift-internationalizing business education curriculum. International Journal of Social Sciences & Education, 5 (1).

Improving Economic Activity Through Tariff Reductions

Trade is at the root of economic development. The easy movement of products and services across borders helps create an interconnected world where opportunities for international goods and companies abound. A paper by Dzerniek-Hanouze & Doherty (2013) discussed the significant advantages that can be found by opening trade routes at a national and regional level to ensure that products and services move smoothly to their destinations. 

All trade is based on selling products from one entity to the next. According to Black’s Law Dictionary Trade is ,”The act or business of exchanging commodities by barter; or the business of buying and selling for money; traffic; barter.” A value laden product must transfer hands from one person to the next while a reciprocal value laden item (i.e. money) is exchanged in return. 

Before revenue can be earned through the selling of products these products must be available and present for purchase. This means that the product is available on store shelves, online, or in the locality for customers to purchase. The buyer and seller must be connected together in some way through virtual or physical means to exchange information, items, or financial value. 

The same process must occur when products and services are built. Available items are used to construct higher level products to earn more on the market. Unnecessary tariffs, restrictions, and levies between suppliers and creators directly reduce the possibilities of further growth and development. This means fewer products are shipped out and less revenue gained. 

The supply chain is the vine that is used to move products and services. When tariffs by importing countries are high it impacts the cost and quantity of those products being moved. As costs increase the likelihood that they will be purchased by locals is reduced; it is a customer equity choice. Tariffs are a direct attempt to damage the supply chain mechanisms. 

Improving the flow of products and services is important in speeding up the economy. For example, improving upon inspections, security technology, communications, and transport can also improve upon the costs of moving these products. Lower costs can often result in improved revenue for companies that rely on imported supplies. 

The concept of economic hubs doesn’t make it exclusively into the paper but the author does indicate that reduced borders increase the spillover effects in management, technological know-how, and access to new technologies that move beyond the goods themselves. The production of products and services enhances the skill and abilities of multiple sectors within the economy. 

The authors offered some interesting statistics. For example, the World Economic Forum, The World Bank and Bain & Co. in 2012 indicated that reducing trade barriers could increase global gross domestic product by $2.6 trillion or 5%.  Ebay also indicated in a study that removing virtual barriers improved small business growth by 60-80%. The end result of their analysis is that if countries moved half-way to best practice there would be a 4.7% GDP increase, a moderate reduction of restrictions would improve GDP 2.6%, and a removal of tariffs would result in a .7% increase in GDP. 

Drzeniek-Hanouz, M. & Doherty, S. (2013). Trade facilitation, international supply chains and SME competitiveness. International Trade Forum, 4

Developing Strong International Retail Management Practices

Developing strong international retail strategy is important for organizations that desire sell products overseas. In today’s world, emerging markets are often a main staple for corporate processes. In the retail industry it is often the internal processes that are as important as the right products in creating structure. The present strength of the company, standardization of core processes, and  focus on customer value that makes the difference between those that will be successful in moving into international markets and those that won’t.

Successful international retail management relies on a number of internal factors that ensure the organization is prepared to take on a wider distribution network with its current structure. According to Vida, Fairhurst & Reardon (2000) these internal characteristics include strategic management characteristics, retail conception, logistics, and the size of the organization. The ability of managers to determine and implement the retail strategy, the retail approaches, logistical abilities, and the capital strength have an influence on whether or not the organization will be successful.

Products that are sold externally are not the main determinants of a successful international retail business. Certainly, the right product helps but isn’t as influential as the companies structure. The profitability of the organization often relies on those internal structural functions that ensure that products are being purchased/developed at a price conscious level and then moved through efficient processes to display them to customers. It is these internal structures that seem to make a large influence that separates the viability of companies within the industry.

Standardization creates higher levels of efficiency when moving and selling large quantities of similar products. Successful organizations often use standardized core elements (store design, locations, etc…) with adjustable peripheral elements (i.e. assortments, promotions, offerings, etc…) (Swoboda & Elsner, 2013).  Such a system allows for sequential and logical adjustments of core structures in response to global market needs without enduring higher expenses in variability and redundancy.

A solid core system can also help to promote stronger distribution management. The logistical market varies among nations and having a proper system can reduce intensity of price competition, collaboration of suppliers, the purchasing of bulk commodities, and the rate of adoption of improvements (i.e. technology) (Fernie, 1995). The realizing of profits through an international supply chain requires the ability to control costs and utilizing an efficient system that can work in multiple economic environments.

Most companies seek to cost cut and expand their markets as much as possible. How a company does this is important for the attainment of goals. According to Abrahamsson & Rehme (2013) those companies that focus more on customer value versus secondary goals in cost cutting or market expansion are more likely to be successful. Even though the goal is the same, the process may vary.  It is the benefit of focus on those things that further the fulfillment of customers’ needs.

Through the development of strong strategy approaches with core processes that adjust to the international market conditions organizations can develop additional retail profits. Instead of simply cost cutting and bulk buying one’s way into profitability it is also possible to focus on the more developed concept of customer value. Each of the decisions and processes should end in a satisfied customer that is willing to develop brand loyalty and long term relationships.

Abrahamsson, M. & Rehme, J. (2010). The role of logistics retailers’ corporation strategy-a driver for growth and customer value. Supply Chain Forum: International Journal, 11 (4). 

Fernie, J. (1995). International comparisons of supply chain management in grocery retailing. Service Industries Journal, 15 (4). 

Swoboda & Elsner (2013). Transferring the retail formal successfully into foreign countries. Journal of International Marketing, 21 (1).

Vida, I., Fairhurst, A. & Reardon, J. (2000). Determinants of international retail involvement: the case of large U.S. retail chains. Journal of International Marketing, 8 (4).