ETHICAL COMPANIES AND CONFLICT
= doing the morally correct thing, and profit driven is not always priority
- many established busiess have long made a point of ethical background. eg. cadbury
- but even here difficult decisions may have to be made. such as closing factors and reopening in another country.
--> the ethical solution would be to help the redundant find new jobs
SHORT TERM: interests of different stakeholders may conflict giving more resources to one reduces those available to another fighting over the shrare.
LONG TERM: working together different stakeholders may improve the performance of the business
= buygers sign a long term contract guarenteeing a 'fair price' which include a 'social premium'
social premium = money on top of the contract which allows them to invest in education, health care and to improve their overall quality of life --> increased income 3rd world.
fair trade has grown from 10% to 43% from 2007-2008
300 products are now fairtrade but thats only a minority
BENEFITS NEGATIVE = raises cost
- Good Pr
- people willing to pay premium
- good image
- promotes investments by producers --> better
- quality and more reliable suppliers
The custom rules and traditions of the community may differ
'one size fits all', often routes to avoid cultural classes = seek local aprtners
Promotion: Images and slogans considered attratcive may be inacceptable in others
Internaltional branding: coca cola, ; others like mcdonalds change products to suit locals
Distribution chanell: access to supermarket shelves is crucial in developed economies but where there are few suppleements another approach is required.
- Joint venture:l ack of local knowledge, goverments block foreign ownership
- Price descrimination: sensible and ethical but look out for seakage,
in spite of a general acceptance that trade leads to growth and increased standards of living
goverments try to intervere in international trade to protect domestic firms from foreign competition
- Strategic industries
- declining industries
- infant industries
- dumping industries
- covert protection
PROBLEMS WITH PROTECTION
- WTO and trading blocs like to oppose protection. eg. EU
- in recessions goverments are tempted to protect domestic jobs but as goverments compete to increase protection, trade diminished --> deepends recession
- business which are protected always find reasons to remain protected so they dont have to become competitive
- denys customers the chance of buying cheaper, better foreign goods
- MNCS sometims can avoid protection by opening subsidiaries behind protective barriers
- some companies become MNCS in order to do so
EG. Japense comapnies locating in the UK to avoid the common external tarrif
Best Buy moving to the Uk as Best Buy Inc.