International Trade
International Trade denotes the exchange of goods and services across international borders. In today’s business world, some businesses conduct their international trade through import or export agents while others have dedicated their entire resources to this market. Making adequate connections together with lasting relationships is very vital to international trade.
Undertaking international trade profitably requires the managers to understand their global customers; this enhances penetration to foreign cultures easily. Skills required to successfully run international trade include; appreciating and respecting other global cultures, ability to learn and converse in different languages and the ability to formulate strategies that help to tap to emerging global opportunities. The U.S. managers can utilize three approaches that can help them lead in the international trade arena these are;
Ethnocentric Approach: This refers to the belief that, people home cultures are superior to foreign cultures and should be respected. In international trade, the concept is used by managers to run businesses the same way other businesses are run locally. The approach can be quite risky and can lead to losing millions in profits, the failure to adopt a business to local cultures can harm an otherwise well established global brand.
Polycentric Approach: This is a business approach used by global business managers to build a workforce through recruiting the local people. This approach is based on the belief that, the local people best know the region’s language, culture & work style. Integrating well qualified local people to the management team can be a highly successful strategy with respect to the company’s products or services among other considerations.
Geocentric Approach: Through this business approach, challenges affecting a business are considered as universal challenges affecting other businesses globally no matter the location of the business. In this concept, highly qualified workers without regard to cultural differences are integrated in the management to solve the problems affecting the business.
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