The exporting of goods is generally considered a “good thing.”
Exporters are praised for their broad marketing skills, interest in new markets but above all for expanding the commercial advantage of their home country.
The importing country is seen to have benefited from new (or better) technology, varied products, the opportunity to consume a foreign product and from being open to new ideas.
But is this always the case and does it lead to sustainable exporting?
Exporting and corporate social responsibility are rarely linked and export markets are not often considered stakeholders but rather “add-ons” to the larger and more important home market.
Social responsibility is diluted for the exporter by distance, cultural values, ethical variations, legal differences and consumer attitudes.
All exporters have a corporate social responsibility to their stakeholders in the same way as does any local supplier.
Broad range of stakeholders
Exporters have a much broader range of stakeholders including the importing client and his customers, the general public of the importing country and the social, legal and commercial infrastructure of the importing country.
For example, the sale of software systems needs to meet not only commercial demands but also social demands.
Good corporate social responsibility delivers benefits to both the exporter and the importer as well as stakeholders in both markets. With best practice all parties receive the best available products and products of benefit to the market.
Best practice will vary from company to company and product to product but it will always focus on what benefits the market most.
What ethical issues then should an exporter consider when reviewing social responsibility?
The following addresses the main concerns that arise for most exporters:
Is the price a fair price for the market and not predatory or excessive. Does it represent a fair return for stakeholders?
Is the price set freely or is there no collusion with either fellow exporters or local manufacturers? There are numerous examples of pricing for services supplied on an export basis being set at internationally without due regard to local conditions.
Has the price been agreed without influence or any form of coercion – a major problem in some markets?
Has the appointment of a distributer/agent been made without third party payments and is the product properly supported in the market both commercially and technically? The export market it littered with examples of companies whose market presence has been weakened due to lack of market support.
Is the product suitable for the market conditions and will it perform as required? Consumer goods often fail to meet local requirements an example of which is the level of energy use in electrical appliances and lighting. Does the product really meet a “need” within the market that is of a higher level than local competitive products – over engineering and design in advance of local needs is often a hindrance to a company’s long-term market growth?
Is the product specification and advertising truthful for the local market and does the promotional literature reflect the advantages of the product in the export market? How often are exported products promoted well in excess of their original market perception? (This often applies to food products).
Will the local consumer be able to complain if the product fails to meet local standards and are there local standards to which the product must comply or be tested?
Best practice is an imprecise term and open to debate, but it does cover a wide range of social and economic issues that exporters need to bear in mind when opening or developing new markets. Best Practice varies from firm to firm.
A further concern for exporters arises when an they retain or employ a local resident to enhance their client service.
Issues that arise in this case include:
- Wage equality – is the wage level fair for the market?
- Employment terms and conditions – Are these common throughout the company and if not, is any differential justified?
- Opportunity for education – is life time education available?
Overriding any export activity, sustainability is paramount. If you can’t build sustainability you shouldn’t enter the market.
Review of export activity point to the fact that those firms who review their market position from a corporate responsibility perspective achieve a long-term market position which becomes self-sustaining.
Whilst it may be attractive to move from one export market to the next, sustainability in any one market has substantive advantage both in terms of cost, management and business culture.
The linking of corporate social responsibility to the export market offers companies the opportunity to meet the expectation of their stakeholders and to enhance the sustainability of an important aspect of any company’s sales and marketing program.
A review of an export plans and function in the light of Corporate Social Responsibility is both commercially and ethically worthwhile for any management team.
Michael Young has extensive export experience having managed both export markets and foreign licensees for over 30 years both in Australia, the UK and Europe. He is a senior consultant with export and licensing consultants Isowall Consulting. Isowall provides advisory and consulting services and a range of market research, strategy advice, market intelligence and risk assessment. To learn more visit: www.isowall.com