Management’s Role in Workplace Communication

Do you look for better workplace communication where you work? Is the information you need to do your job fully available, and does management listen to you? These issues are critical factors in workplace communication, which is about the channels and procedures that bring information to you and get your information to your manager; and it’s about management’s responsibility for it.

A few years ago the British Broadcasting Commission aired a series of unique business documentaries titled Back to the Floor. If you’re not familiar with the series, it featured real-life Chief Executive Officers (CEOs) who leave their comfortable offices and go work on the front lines of their organizations for a week. Cameras followed the CEOs and recorded their interactions with staff, and their responses to those interactions.

In one episode, the managing director of London’s Heathrow Airport took the plunge and worked in customer service for five days. That meant facing customers and dealing with their problems, including problems created by the airport’s own management team. Again in this episode, workplace communication turned out to be a key issue, as it so often does in business stories.

At Heathrow, we saw a CEO taken by surprise, over and over again, as he learned about work life at the front lines. The employees on the front line, and customers too, let the CEO know they were dissatisfied. The staff wanted to let him know about the trouble they had because the people at head office weren’t listening to them.

Over and over again, workplace communication, or a lack of it, came up as a key issue, as CEOs discovered they knew little, or less than they thought, about dealing with real customers and their problems.

Heathrow is hardly an exception. When I published a communication newsletter, the most frequent reader feedback involved management’s failure to listen. Readers made it clear that managers in their organizations did not know what happens in their world, and even more importantly, felt management did not care.

There was also a feeling that individual managers were to blame. However, in my research and experience, it’s not a ‘moral’ failure on the part of individual managers, but rather an institutional failure. In other words, the mechanisms that allow or facilitate workplace communication simply don’t exist.

To establish and maintain these channels and procedures, management must first take responsibility for them. Unless management takes the initiative, there can be no channels for workplace communication, whether up or down the hierarchy, to flow.

After all, employees can — and often do — express their ideas and emotions. But nothing can happen unless someone in management allows it to happen.

For example, in the Heathrow program, the managing director spots some trash in an out-of-the-way spot and calls in a cleanup crew. The customer service manager, who supervised the managing director for the week, chastised him for incurring an expense that wasn’t in the budget (an appropriate response because the customer service manager would be chastised by his immediate superior if he had done that). In response, the CEO made a key policy change on the spot (never a good idea); yet what he really needed were mechanisms to get and give information about such problems, and a then policy that stipulated when exceptions could be made.

By creating a mechanism that allowed workers at the front lines to communicate about that kind of problem (trash), he would get both better results and greater employee loyalty.

In summary, effective workplace communication is only possible when mechanisms exist to move information both up and down within the organization, and only management can establish and maintain those mechanisms.

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Workplace Communication

Communication is a two-way process. Communication is successful only when the receiver understands the message intended by the sender.

Effective workplace communication is very essential for smooth and efficient functioning of an organization. The manager should have proper communication with his subordinates, else it will lead to absenteeism amongst workers, lower productivity, development of grapevine networks in an organization. There should be two-way communication in an organization. Manager should have personal contact with his subordinates. He should clearly communicate goals and policies of the organization to his subordinates and should get feedback on these goals and policies.

Feedback plays a very important role in the communication process. It enables us to evaluate the effectiveness of our message. Giving the subordinates chance to provide feedback is important for maintaining a open communication climate. The manager must create an environment that encourages feedback. For example: after communicating a job assignment, he should ask “Do all of you understand?”, “Is that clear?”, “Do you have any doubts?”, etc. This will ensure that whether his message is understood or not.

Both upward and downward communications are important. Upward communication will keep manager informed about employees job satisfaction, employees feelings for their peers and about organization in general. Downward communication is important so that manager can give job instructions, explain the roles and policies and explain the issues which need immediate attention. Similarly we have horizontal communication in an organization which is also very important. It is essential that people working at same level should have effective communication amongst them so that there is co-ordination between them. Communication at workplace should be clear, concise and specific. There should be effective use of body language at workplace. Body language reflects the position of a person in the organization. A manager should make effective use of his body language while communicating with his subordinates.

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Creating Great Workplace Communication With Fire Pits

Did you know that the most successful businesses often have great workplace communication? This makes up the foundation of any business that runs efficiently and is profitable. With great communication, employees do not get sidetracked by drama or harmful gossip. Instead, with honest communication you will find that employees work together to solve problems and enjoy one another’s company.

Workplaces that have open communication between all people do not just randomly stumble upon this great attribute. It takes hard work to achieve a culture of communication and transparency in any business. If your workplace could use a boost in its workplace communication, then there are a few steps you can take to improve this important part of your business.

Sometimes businesses work best when a subtle approach is taken to things like communication. Instead of hosting an intense meeting about workplace communication, try hosting a laid back social event. It may seem counter-intuitive to approach workplace communication with a casual level of attention, but this can be one of the best ways to make your point to your employees. Employees do not usually benefit when a boss lectures them or yells at them, especially in areas like workplace communication.

Instead, try hosting a social hour at your own home for employees. This can be the only subtle cue you need to use to show employees that you care about creating a good social environment in the business place. A social hour only has to last for a couple of hours and it is a good time for employees to relax and be honest about how they feel about the business. Lighting a fire pit can add to the comfortable ambience of the social hour. A fire pit has an inviting warmth that will make every employee feel welcome to the event, regardless of any circulating gossip of rumors going around the office. Hosting a social hour can almost create the fresh start your business may need in its workplace communication department.

If you want your business to better serve customers, then having great workplace communication is a must. You simply must care about this part of your business, in order to have a professional environment that is honest and filled with people always willing to work their hardest. Hosting a social hour at your home is a great way to make peace with your employees and get them to bond with one another.

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Different Barriers to Effective Workplace Communication

Do you remember playing the “broken down telephone” game as a child? The one where a message was passed down a line of players, each one whispering the message to the next – and then laughing at how drastically the message had changed from the original? It’s not unlike what actually happens in the workplace. Each player in the game represents a different barrier to effective workplace communication.

There are probably as many different barriers to effective workplace communication as there are people trying to communicate. We are, after all, highly complex beings using very sophisticated language skills to duplicate concepts in our minds into the minds of others. Something is bound to go wrong.

In terms of different barriers to effective workplace communication, here are some of the main culprits:

Poor listening skills: It has been said that we listen in order to reply rather than to understand. We occupy our thinking with what we think is being said and what we think about what we think is being said, rather than what is actually being said. When you communicate with someone simply assume that they are not hearing what you are actually saying. Check out their understanding by asking for feedback. Ask them what they have understood you to say, and then correct the misperceptions.

Lack of purpose: You must have attended at least one meeting where you came away wondering what it was all about and what the purpose was? And after that meeting you decided that unless you were compelled by force, you would not attend any further meetings convened by that person. A major barrier to effective communication is that the person is not clear about the purpose of their communication. In effect, they don’t know what response they are looking for. In a busy workplace people do not have time for purposeless words. Before you call that next meeting, or write that email or have that conversation, ask yourself the question: “Why am I communicating this and what do I want this person to do as a result of this?” And then frame your words to ensure that response.

Low levels of rapport: Unless you have built credibility with your listeners, at the back of their mind is the question: “Why should I listen to you?” We are inundated with so much information that we become selective about what we allow in and what we notice. To be allowed into someone else’s thought space we have to build rapport with them so that they regard information coming from us as valuable, useful or credible. Why are you reading this article? At some point you decided that what I have to say here is useful and that I have some credibility – so you have continued to read. Others looked at the title and author name and moved on. We can’t have the necessary level of rapport with everyone. Don’t assume that because you are someone’s manager or colleague you have automatic right of access. Take time to show listening to you is of value, and others will begin to hear.

Too much communication: There’s a traffic jam on the information super-highway, and each day we venture out into it, either willingly or reluctantly. It can’t be avoided. To cope with all the information coming our way, we filter everything to find what we really need – and we ignore the rest. In the workplace we are tempted to send out communications because we can and because it is easy. We send out email circulars about everything, and we hit “reply to all”, not because everyone really needs to see our response but because we think they should take note of what we have to say. Eventually the recipients simply hit “delete” on anything that doesn’t immediately show itself as relevant. To be an effective communicator, be a rare communicator. If you only communicate relevant information and don’t abuse the system to let everyone know about every thought that crosses you mind, recipients will get to know that when something comes from you it is worth sitting up and noticing.

To overcome the different barriers to effective workplace communication, ensure that you are a relevant, rare and interesting communicator. After a while, people will be looking out for your next contribution.

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Workplace Communication – A Strategic Perspective

In my earlier article titled “Workplace Communication – A Practitioner’s View”, I had suggested deployment of a strategy as part of a comprehensive approach to employee communication.

Just to re-emphasize, I had suggested that the Workplace-Communication is a self-perpetuating process that aids the organization in achieving its goals by;

Interlinking various levels of hierarchy and functions;
Acknowledging employees about the organization’s vision, values and goals for enlisting their commitment;
Helping employees identify themselves with the organization’s vision and enabling them for prioritizing their actions; and
Helping the organization generate openness & mutual trust and develop congruence between organizational & individual, goals & efforts.

Here, I will now elaborate on the substance of a strategy for Workplace-Communication. Before we begin, let us hold a common meaning of strategy as “a plan of action designed to achieve a long-term objective”.

Workplace-Communication is somewhat akin to “internal advertising” with clarity on “Above The Line” and “Below The Line” approaches. The underlying purpose of the Workplace-Communication strategy is to keep employees adequately informed all the time regarding the current status of business, future prospects, issues concerning their jobs & careers, market conditions, etc., essential to achieve a greater congruence between organizational & individual, goals & efforts.

So what are the core elements of a sound Workplace-Communication strategy?

Development of the strategy

There is no point in presuming what employees would like to know or should know. It is a common sense as well as a daunting task. While developing a Workplace-Communication strategy, the organization should consider aspects like employee demographics, average education profile, average age profile, cultural diversity, language proficiency, etc. It would be worthwhile to do a dipstick on “what, when & how” employees would like to know about the business of the organization as well as about their jobs & careers. While every employee need not receive all the information, he / she should certainly get what is relevant to him or her at the right time.

Classification of information or data

Having identified “what, when & how” employees would like to know, each piece should be classified in terms of criticality and target audience. Classification should also include who should know what, when, how and from whom. The moot point is that the employees have the first right to information about the organization, and if they come to know about their organization from the external agencies, then the organization stands to lose credibility. This component has a stand alone weight also when the organization does not have a strategy for workplace communication.

Periodicity of communication

Too frequent or too infrequent communication – both are ineffective. Therefore, each piece of information should have a specified relay periodicity. The analogy is with the daily morning newspaper which has to come every morning and a fortnightly tabloid which has to come every fifteen days. Of course, in case of emergencies or special situations, information ought to be relayed immediately. There is no point if the invitee receives the marriage invitation after the couple is back from the honeymoon.

The language of communication

It is vital to convey information in the language which employees comprehend. It cannot be Shakespearean English when you are a Russian company. Relaying information concurrently in English as well as in the vernacular and / or the national language (if English is not the national language) is the most preferred way. It is also helpful to use visuals and videos depending on the topic. When communicated in the vernacular language, it is important to have a transliteration and not translation. The core aim of this component is to reach out to maximum possible employees.

Channels of communication

This is a challenging component of the workplace-communication strategy. It is entirely up to the organization to innovate on this front. The strategy by design should focus only on formal channels as informal channels have different purposes & implications. So what are the options?

Induction program / tour / film and intense (yes, I mean intense) interaction with the senior guys around

Well crafted induction & socialization booklet with visuals and emphasis on values and ethics

Bilingual monthly or quarterly magazine / newsletter (print as well as electronic version) with designer looks

Mass SMS (can be a powerful tool for conveying exciting news)

Updated “Employee Section” on the company’s website (accessible to employees only though their PCs, Laptops, Tablets and Smartphones)

Team or Department review meetings on a monthly basis (each such meeting must start with a brief on the overall business status and then only the departmental agenda should be discussed)

Circulars or Emails (for example, sharing quarterly / annual business results with all the employees one go) from the CEO or a designated senior and displaying a copy or transliterated version at all the conspicuous places

Display of the organization’s vision, mission & values in the most conspicuous places with suitable designs. Such display should catch attention immediately.

Conventional as well as digital boards / panels depending on the time of information

Computer screens / permanent standies

Training events (very intense tool to communicate with employees)

Official blogs / chat platforms

Annual or half-yearly get-together

Official letters given to employees (offer letter, appointment letter, confirmation letter, compensation revision letter, promotion letter, transfer letter, recognition letter, termination letter, etc.)

Feedback process

Do employees get to know about the organization what they need to know? Do they find the content relevant? Are they able to relate their own performance & experiences with that of the organization (barring the impact of external factors)? Are they receiving information as per the promised periodicity? Do they find the language lucid and the media apt? No communication can be effective if it is not two-way and understood properly. Therefore, it is pragmatic to have a periodic check on the effectiveness of the content, channel, periodicity, language, etc.

Core Group

A group of employees should be entrusted with the responsibility of ensuring the effective implementation of the communication strategy. The group should include the HR Head, at least one designated business head, Head of Corporate Communication, Head of PR and at least two employee representatives. It would be prudent to have a good balance of male & female members and seniors & juniors. Young guys have ideas & energy and veterans have the wisdom. Like the classification of information or data, this component too has a stand alone weight.

Conclusion

Over-communicating is better than under-communicating. Information in the organizational context is an essential food for thought, idea-generation, discussion, decision and action. So having a well-defined Workplace-Communication strategy and ensuring its effective implementation, is surely vital for the organization’s business & success. Communication could be spicy at times, but its real hallmarks are timeliness, adequacy, realism, language and the reach. Someone has aptly said that, “the skill in the art of communication is crucial to a leader’s success. He / she can accomplish nothing unless he / she can communicate effectively”.

Let me end the article with a quote from Anthony Robbins – “To effectively communicate, we must realize that we are all different in the way we perceive the world and use this understanding as a guide to our communication with others”.

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The Unintended Consequences of Globalism

Globalism might be good for the world economy as a whole, but does not necessarily mean it has been good for the American worker. Whether intentional or unintended, the American worker has suffered through the philosophy of free trade. Do not miss quote me, Globalism has a lot of positives. Now more than ever the people of earth are connected through the internet and can communicate information faster than any other time in history. People are exposed to different cultures and ideas, and the free flow of information is exponentially evolving our society. “Free trade” plays a big part in globalism, which is why there has been a “backlash” from non-college educated workers in wealthy countries in direct response to the effects of free trade policies. When wealthy counties openly trade with developing countries it can overvalue the wealthy countries currency, which in turn makes imports cheaper while exports become more expensive. However, according to the Economic Policy Institute, the real culprit is not the valuation of the dollar and the increasing trade deficit. (Bivens, Economic Policy Institute)

The USA has increasingly shifted its economy from manufacturing to services like banking and investing. It is cheaper to import products of manufacturing from a country that has extremely cheap labor than it is to employ American workers in the United States. This in turn means there now is a premium on college educated Americans who are filling job openings within the service industry. On the other side of the coin, manufacturing jobs are leaving the country and lowering wages of workers without a college degree. This fact coupled with increasing technology that replaces workers and a trade policy that out prices “expensive” American workers is leading to decreased wages. As the US trades more with developing countries as a percentage of GDP, the wages of unskilled workers continue to decrease. (Slaughter and Swagle, International Monetary Fund)

Though Globalism has a net increase in GDP and employment for countries involved, most of the gains from free trade is disproportionately received by the top 1% of Americans. Policies that protect corporations and their interest at the expense of the American worker exacerbate the problem. Trade policies like NAFTA and others have little protections for workers and heavily favor the multinational corporations that seek to benefit from free trade. This only adds fuel to income inequality, which for poor countries can increase economic growth while having a negative effect on rich countries. Rich countries are also at higher risk of financial crisis when they have high levels of income inequality. (Malinen, Huffington Post)

Globalism and free trade are linked very close together, which is why there is a stigma attributed to the word. There has been growing resentment within the US and other wealthy nations of globalism as a whole. They do not just condemn free trade, but openly blame minorities and marginalized groups for their decrease in wages and “eroding” their cultural dominance that they claim dominion over. This is a deadly cycle, as income inequality only feeds this type of behavior. In a country that is not adequately educating its people, more of the workers within its country will become more ignorant. With free trade putting a premium on college educated workers and decreasing wages of unskilled labor, we are now almost at a tipping point, socially and economically.

Globalism has many unintended consequences that inadvertently caused huge social and economic problems within the US. The problems that globalism is causing is not a hard fix. Reducing the income inequality will eradicate more of the negative effects of globalism. Universal Education, Universal healthcare, and a rewrite of our tax code are just a few ways to reduce income inequality. All of these possibilities are well within our means. We have to take care of these problems swiftly, before globalism becomes an integral part of our own decline. (Mason, Post-Gazette)

Bivens, Josh. “Using Standard Models to Benchmark the Costs of Globalization for American Workers without a College Degree.” Economic Policy Institute. N.p., 22 Mar. 2016. Web. 25 Apr. 2017.

Malinen, Tuomas. “The Economic Consequences of Income Inequality.” The Huffington Post. TheHuffingtonPost.com, 17 Dec. 2015. Web. 25 Apr. 2017.

Mason, Bob. “Single-payer Health Care Would Help to Treat Three Separate Threats.” Pittsburgh Post-Gazette. N.p., 26 Oct. 2014. Web. 25 Apr. 2017.

Slaughter, Matthew, and Phillip Swagel. “Economic Issues 11–Does Globalization Lower Wages and Export Jobs?” International Monetary Fund. Imf.org, Sept. 1997. Web. 25 Apr. 2017.

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Global Trends in the Cosmetic Industry

Cosmetic dyes and colours: Explained

Cosmetic colours are also known as cosmetic lakes. These colours are produced by taking the help of absorption of dyes that are water-soluble onto a substrate. It makes the colour insoluble in water. Cosmetic lake colours are made by making use of unique technology. The technology helps in attaining extremely fine particles. These particles help in achieving shade consistency. In comparison water soluble colours, cosmetic lakes are much more stable & safe. They also generate vivacious and brighter colours. It has been seen that cosmetic pigments and lakes are more suitable for food products that contain fats and oils. They are also suitable for those products that do not contain enough moisture for dissolving colours.

Cosmetic dyes, on the other hand are used for making cosmetic colours & products. These dyes are widely used by the cosmetic manufacturing industries and businesses all over the world. They are primarily used for manufacturing hair dyes, lipsticks, nail polishes, shampoo as well as other personal care products. It has been seen that generally water soluble & food dyes are very easy and safe to use. These dyes are mostly used for a wide variety of applications. They include cleaning chemicals, soaps, medicine, cosmetic products etc.

Know which ones are safe for use

Be it the use of any type of cosmetic dyes or cosmetic colorants safety of use is a primary consideration. Cosmetic colours and cosmetic dyes often make use of a wide range of synthetic colours. These are often referred to as FD&C colours. They are mainly extracted through coal tar and are basically a by-product of petroleum. Research shows that some particular coal tar based dyes lead to different types of cancer. This is why the FDA regulates them. They also determine the arsenic or lead amount they contain. Thus there are many restrictions in the use of such colours.

Some global trends in Cosmetic dyes and cosmetic colours

Worldwide it is seen that North America, followed by Europe, has the largest market for colour cosmetics. This is due to innovations in colour cosmetics. Other factors also include high consumer disposable income and frequent new product launches in colour cosmetic market in the region. However Asia too is expected to show high growth rate in the colour cosmetics market in next few years. This is on account of the increasing consumer incomes and rising in awareness about personal care products in the region.

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Economic Turmoil and the Future of Brazil

For many years, Brazil has been an emerging economic hub, attracting investors from all over the world. The Brazilian economy saw an 368% increase in Gross Domestic Product growth from 2003 to 2011. In addition, Brazil took in almost half of Foreign Direct Investment flowing into South America during 2015. This doesn’t come as a surprise since it reigns as one of the major emerging national economies. However, Brazil has seen a recent economic downturn with increasing unemployment and a contracting GDP. In fact, the Brazilian government cut 2017 GDP expectations from 1.6% to 1% growth. Having been one the most lucrative foreign investments for governments to individual investors, what happened to the so-called “Country of the Future” and can Brazil regain its momentum?

Back in 2015, recession hit Brazil hard and the country is still struggling to get back on track. According to the CIA World Factbook, the economy contracted 32% from its peak in 2011 and unemployment reached a new high at 12.6% in 2016. Being based mostly on services, agriculture and oil, Brazil’s economy has a direct correlation with global demand. With global recession looming, Brazil is feeling the effects of a slow world economy.

Brazil is a top tourist destination offering beautiful beaches, a diverse culture and exciting festivals. However, with the world economy slowing down, people are less likely to travel abroad. Since the majority of the country’s GDP derives from the service industry, Brazil will not be able to rebound any time soon unless there is a major boost in consumer confidence.

The demand for Brazilian exports was slashed when its largest trading partner, China, entered into an economic slowdown of their own. The decrease in exports caused massive layoffs throughout the nation. The notorious economic downward spiral began by wary consumer spending as unemployment rose. Companies that tried to gain capital by borrowing in U.S. dollars found it difficult to pay back those loans as the Brazilian Real crashed 25% in the span of a year in 2015.

One of the major hits came from low oil prices and the corruption of Petrobras, a large oil company and Brazil’s largest source of investment. Brazil is major producer of oil, exporting $11.8 billion worth in 2015, according to the Observatory for Economic Complexity. OPEC delivered a major blow when the cartel decided not to cut oil production, causing oil futures prices to plunge. In order to cope with heavy losses, Petrobras was forced to sell off assets and halt future research and expansion plans.

As if things weren’t going poorly, Petrobras was also caught in a scandal with former Brazilian president Dilma Rousseff and other high office executives. From 2004 to 2012, the company had spent over $2 billion on bribes to politicians whom would allow the company to charge inflated prices for construction contracts. Now that the scandal has unfolded, Petrobras executives face jail time and the company as a whole is forced to pay billions in fines.

So what does the future hold for Brazil?

Although at the moment the future looks dim, there are still signs of hope Brazil can turn itself around. The Real has seemed to stabilize in 2016 and heads into 2017 with an upward trend. Moreover, experts’ GDP projections for 2018 through 2020 show promising figures that Brazil can restore pre-recession level growth.

Even more promising, U.S. companies are still showing faith in Brazil’s future. American Airlines plans to invest $100 million in an aircraft maintenance center in Sao Paulo. Brazilian Investment Partnership Minister Wellington Moreira Franco and many countries like the United States, United Kingdom, France and Japan agree there are still reasons to invest in Brazil. This should be seen as a sign of confidence that the Brazilian market will grow soundly with the support of both national and international investment.

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The Effects Of The Global Trade Agreement

We live in a world that is increasingly getting connected. In such a world, trade agreements are bound to expand internationally, and to think and act otherwise would be downright stupid.

These global trade agreements, as such, are either bilateral or multilateral understanding between two or multiple countries and govern the trade policies between them. These agreements have a massive impact on worldwide trade and investments and are one of the major causes responsible for shaping business relationships across the globe. And while such agreements might not affect directly affect the place where you live or operate, being aware of the current trade agreements can definitely uncover numerous opportunities.

Forming up opinions is up to you; we do not intend to initiate an argument over how good or how bad these global trade agreements are. This article aims to get you familiarized with such agreements and tell if your supply chain could be affected or not.

While a few countries have settled upon free trade agreements and are in the process of widening them, a number of other nations have formed common markets and unions; this form of development can a have a thorough effect on small-scale businesses.

Two of the most common agreements are the Trans-Pacific Partnership (TPP) between Australia, New Zealand, Singapore, Canada, Brunei, Peru, Mexico, Chile, Malaysia and Japan, and the North American Free Trade Agreement (NAFTA) between Canada, United States and Mexico.

Now, how such agreements impact your local business’s supply chain depends on a simple fact; whether your business is an importer, exporter or neither.

Scenario 1: You neither import nor export

It’s fairly easy to decide whether you are an importer or not, right? I understand that you do not directly source products from a foreign supplier, and technically speaking, that doesn’t make you an importer. However, trade agreements can still impact you. Your suppliers are directly affected by such regulations, and this vulnerability can affect your supply chain.

Keep the distinction in mind.

Scenario 2: You identify yourself as an importer

Owing to the low cost manufacturing in some countries, many small scale suppliers are able to compete with global giants.

With a trade agreement between two countries, most of the times, the country with lower labour costs benefits when the trade tariffs are lowered or eliminated. With trade agreements, importers usually get to source low-cost goods and it allows for the unrestricted movement of such low-cost goods through higher cost partner nation.

In case, such an agreement is dissolved, an importer would inevitably face a higher cost of goods and thus look for cheaper sourcing options, decrease their operational costs, and ultimately increase the prices, which would be borne by the customers, of course.

Scenario 3: You are an exporter

This even counts if you sell products that another firm exports because at some point or other, taxes would be levied on your sold goods. So how does it affect you? Your customers end up paying higher amounts for your products.

With a trade agreement in place between the country where the product originates and the receiving country, the very same products would move through the receiving nation freely. In such cases, you’d definitely want to keep such an agreement intact and leverage this competitive advantage you have in this particular country bound by trade regulations.

As a small or a medium sized business, it is therefore important for you to identify where your business lies with respect to global trade agreements.

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The Paramounted Importance of Critical Analysis in International Trade Policies

International trade is largely based on the constant fluctuations in the world-wide economy, this resulting in constant changes with regards to tariffs, trade subsidies and unending amendments of regulations with regards to international trade. “Trade policy and economic Growth”, a paper by Keith Maskus, PhD, focuses on the relationship between trade policies and the growth of the economy or lack thereof, the main point of interest of the paper was to establish whether the variance of trade policies will affect the economic growth of any country. The conclusion reached was that open economies tend to grow faster than closed economies, ceteris paribus. therefore concluding that open competition is good in the sense that it improves resource distribution and the country gains in Investment and innovation.

An organisation that is involved in international trade has to pay special attention to such information. There might not be any countries with closed economies however there are countries that have low imports to the point that they are regarded as closed economies for instance Brazil. In 2011 Brazil recorded 13% as its import percentage which was quite low for a country of its stature. Is it not then imperative to constantly be up to date with changes in the trade policies of countries one is interested in pursuing trade relations with? since there is a proven positive relationship between the openness of an economy to competition (thus meaning the country is greatly involved in trade) and the growth of that country`s economy, this serves as an indication of how lucrative and profitable a business venture would be under such circumstances. The Critical analysis aspect then comes into play by determining how much gain or loss would result from substantial changes to the policies, which are measures and instruments that can influence export and imports, the objective being the policies influence the trade sector to the result of profit for the business venture. one might feel a degree in commercial management is then needed in order to fully understand all the kinks and edges of the international business, and they would be right, but the eventuality is that it will always boil down to intelligence and efficiency in the analysis of trends, calculation of potential profit/loss, predictions of future stability or fluctuations in the world economy prompting changes to prices in the trade sector.

There is one other important factor that can alter potential business plans, and that is the politics of the country in question, policies are easily influenced by the politics of the nation, and it is thus advisable that critical analysis be also engaged, this results in better understanding of the country and its stability thus reducing the chances of incurring a bad business eventuality. Nations are not governed by robots, unfortunately, but are governed by people with interests and human nature desires to differ from individual to individual making it difficult to maintain a constant effective system. if politicians are elected they tend to focus on altering policies for their own benefit, and the benefit of those they promised (if there are still honest politician available) from that point it is important that international business consider such factors before pursuing business. Prime examples being, whenever there are strikes in South Africa investors tend to shy away, and most of the strikes are birthed from political influence, thus deeming South Africa an Unstable nation to invest in, or Zimbabwe a nation sanctioned, due to political infringements, making the country undesirable for investment irregardless of the profitability of the business idea. It is thus an excellent idea to firstly research in-depth to the politics of the country before hand and invest with,much-needed information, guiding the innovative decision made.

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