International Business Savvy - Purchasing Internationally

In the current Global Business paradigm outsourcing and purchasing from international vendors is the norm in Corporate America. Even small and medium sized businesses must be thinking here to trim costs, remain competitive and survive. With these truths unveiled perhaps I might be so bold as to recommend a very good book, on International Purchasing:

"International Purchasing Handbook" by James M. Ashley - 1998.

There are almost too many traps to consider in international purchasing. This book spends quite a bit of time explaining how global sourcing in the Pacific Rim, must be understood by international purchasing agents if they hope to succeed. Finding experts is paramount and understanding how these suppliers think is too and that is before you even get into language barriers, legal barriers, tariffs and getting payment to them or receiving payment. How to use brokers, clearing houses, freight forwarders and trading companies are clearly defined in this book with case studies, examples and warnings.

Importing on your won, there is a whole chapter on commercial invoice, certificates of insurance, certificates of origin and payments in accordance with importing rules and regulations. There is also a chapter on developing a sourcing plan, finding international sources and making international relationships; empathy, understanding, history, etiquette, friendliness, and how to win and dine. Sub-chapters on Singapore, Taiwan, Hong Kong and South Korea, with topics on Southeast Asia, Europe - both East and West. Some discussion on Middle East, Israel, and Latin America too.

Learn how to negotiate with foreign partners and suppliers. How to negotiate with various cultures and how to document tactics, all key to international purchasing and well defined in this work. The book is filled with contracts and things you need to know when contracting once you have negotiated terms, more importantly how to enforce these contracts and how to consider the costs in every single clause of the contract. There is a chapter on various laws in international business as well as trade quota issues and explanations of International Agreements and Associations:

•     GATT
•     WTO
•     NAFTA
•     ASEAN
•     APEC
•     AFTA
•     ATPA
•     OECD
•     CCET
•     CBERA
•     CCET
•     CBERA
•     IBCC

Next, the book describes the important issues of quality when dealing with foreign suppliers and how to manage accounts payable, letters of credit and managing of changing currency exchange rates. This is the best International Purchasing Book that I have ever seen and thus it resides as a reference book on my personal business library shelf. I recommend you go and find the latest printing a pick one up for yourself.

International Business - Expatriate Selection

It an earlier article I noted that American companies continue to think of themselves as American, not multinational, thus assignments overseas are not viewed in a strategic totality, but rather as a nuisance that must be dealt with from time to time. So, when a requirement surfaces for a manager in China, Africa or elsewhere, there normally ensues a mad scramble to find someone willing to take the position. Overlooked is whether that person and his/her family are actually suited for the position and the required life style. The result can be an expensive disaster for both the company and the family involved.

Successful expatriates are born not made. Individuals assigned overseas must bring to the job the innate ability to live and work in a different culture and the personal characteristics necessary to adjust to a variety of business styles and ethics. Only a sharply focused selection program designed to identify the proper attributes can determine who has the "right stuff." American firms spend millions each year determining which employees should be in management or sales, why should expatriate service receive less attention?

The current practice of a 2 3 year assignment overseas as part of what is otherwise considered a stateside career will no longer suffice. Once individuals (and their families) have been identified as international material, their careers should be channeled in that direction.

Indeed, in the absence of such a career path, a position overseas can be a career breaker. Once out of company view, employees overseas can be divorced from their support systems and mentors. Often a return after a three to five year assignment can be as daunting as going abroad in the first place. Without a solid career path in place, there may be no "next" assignment.

This paper proposes that a company with international operations create career paths and succession planning for employees suited to international work in the same way they are developed for employees in other disciplines.

The first step in this process is a skills inventory. Given current computerization, there is no reason for a company not to have a complete history on each employee. And while this will not and cannot provide a complete picture of each employee, it would allow management to identify those employees who have experienced relocation, who have traveled extensively, who have multiple skills and perhaps some language capability. From this initial screening, further evaluations can be made.

Once identified, employees and their families should undergo a rigorous screening process to determine their suitability for an international assignment. This would include, in addition to their normal management capabilities, high inner work standards, a focus on results, a desire to understand and a willingness to accept and appreciate other cultures, a willingness to try new things, independence (the family can operate as a unit without large or multiple support systems), no overriding family or personal problems and most importantly - want to be there.

After qualifying for an international position, the employee should be assigned to a stateside position that coordinates international operations until such time as an overseas assignment becomes available. Of equal importance is a through grounding in corporate operations and culture.

A little understood or appreciated facet of overseas work is the role that personal relationships play in success. They are the glue that holds international operations together, particularly in the Far East. Developing and nurturing them takes time and energy. Therefore, 5 10 year assignments need to be viewed as the norm.

Establishing career paths that integrate international operations as part of a strategic whole diminishes repatriation disasters and permits the company to take a more sane approach to expatriate staffing. More importantly, when not on overseas assignment, these employees can bring much a needed global perspective to company programs and plans. Qualified and successful international employees are an expensive and important resource that should be nurtured and utilized fully.