International Marketing Practices

trade differently, and they can promote, impede, compete with, or replace international import and export [20]. Governments can set up barriers to trade to limit what can be imported to or exported from a given country [20]. Governments can also have a strong influence on how business transactions are conducted, including selection of investment, control of takeovers, how mergers and acquisitions are achieved; regulation of ownership, managerial control, and employment; and taxation and regulation of financial transactions [20]. Finally, governments strictly control things like license requirements for international trade, tariffs, and quotas. Standing government policies are directly affected by politics. Businesses rely on political stability for effective long-term planning, and political fluctuation brings rise to trade concerns [19]. To combat the threat of changing political climates, firms can assess their political vulnerability by gauging sensitive products and issues, as well as forecasting political risk. Assessing political vulnerability, which can be defined as the attempt to forecast instability within foreign politics, is used to assess company risk and adaptability [19]. Politically sensitive products are those that are ill-received by the population, usually surrounding health or image. Political risk can be combatted through the integration of joint venture, expanded investment base, licensing and franchising, planned domestication, and political bargaining into company policy [19]. Finally, in some foreign markets, there is potential for corruption, which can happen at different administrative levels. Moreover, forms of corruption can be seen as the “usual” way of conducting business in some countries, especially with as strenuous and lengthy a process as the international trade of forest products, which presents many opportunities for bribery. Transparency International publishes the Corruption Perceptions Index, a measure of public sector corruption for 180 countries as perceived by businesspeople [26]. Businesses should be aware of the Foreign Corrupt Practices Act (FCPA), which contains anti-bribery provisions that make it unlawful for U.S. individuals or businesses to “… make payments to foreign government officials to assist in obtaining or retaining business ” [27]. The FCPA also prohibits paying bribes directly or through intermediaries. Specific to forest products, actions such as the Lacey Act and the Forest Law Enforcement, Governance, and Trade (FLEGT) Action Plan attempt to address some of the effects of political corruption. These regulatory frameworks are discussed in detail in Chapter 2. Chapter Questions

1. Why are you considering international marketing? 2. Are you committed to entering international markets? 3. Do you have a specific region you want to enter?

7