As I study world affairs and read through the international and business news I see mistakes being made by many diplomats of many nations – things which cause friction in our global supply chain. These wheels need greasing, not more regulations or forced tariffs and barriers. If money is allowed to flow without restrictions in the global economy, without manipulation or interference due to disputes or human conflict – we can have a much safer world without all these wars and war posturing. Okay so, let’s talk about some international business issues that have flown across my radar screen recently.1. Last year North Korea stopped a factory in a neutral industrial zone along the border of South Korea – a shoe factory making bright colored tennis shoes for exports. With the shoe factory closed the supply and demand of the market was unbalanced causing an increase in shoe costs.
2. Bangladesh factory fire that killed all those people in Mid-2013 caused everyone to criticize American Companies which would inevitably buy those products through vendors or the components for products in the competed products from certified vendors – so many US companies halted buying anything from Bangladesh until that government made new standards and enforced them. But as bad as the conditions are those who have those jobs feel “fortunate” to have them, as they are good jobs and feed their family – now many out of work.
3. In some of the shoe factories in some Asian countries the workers cannot afford to even buy the shoes they make, so one US retailer is now giving away a pair in that country for every pair someone in the US buys at retail; $60.00 here, they make them for $1.45 cost there. But the PR is well received because the US wants to help out.
4. Shoe Drives in the US after Haiti Earthquake sent over nearly a million pairs of shoes, more than they needed. This was easy because the average American has 10 pairs of shoes, now all those non-needed shoes are dumped in the landfill which is already overflowing, and many people are trying to sell the best ones at little shoe stands – basically free-inventory.Although that fourth one wasn’t a business issue, it shows how misinterpretation and poor knowledge or what’s going on can lead to unintended consequences no matter how good the intentions were at the onset. Perhaps you might consider all these things, as examples of where we all need to work harder at allowing international business trade to work things out without adding sound and fury to the friction of the human endeavor.