Executive summary
Creating a sustainable business environment for the Government of Madripoare is not complicated. However, it needs some strategic consideration. Four different scenarios of World Commerce Organizations are presented along with several insights and facts. The report elaborated all these issues with the possible impact on the firm performance and the business sustainability. Different problems for World Commerce Operations are FOB/CIF, Inefficient Operations, Ineffective Contract Agreement, and “in apparent good order and condition.” This illustration of issues links with the role of the government and some applicable laws. The company wants to eliminate the international business barrier, and through implementing some applicable rules, it can enable the sustainability and success. Interestingly, with the perspective of the government, making the flexible international business regulations is a right approach. It helps to relive trade barriers and let companies perform well in the sustainable business environment. After elaborating issues, different perspectives are described along with the impact on the international business partners. World Commerce Operations sells the different product to China, Philippines, Japanese, and Thailand. It seems sturdy to match terms and conditions, and it is one of the prominent barriers for the company. In the end, some key recommendations are proposed for the World Commerce Organization. These recommendations are changing process, finding the strategic partners for collaborations, and application of the law. With the perspective of the government, some amendments are also needed in the international business regulations to contribute to the business sustainability. The World Commerce Operations has to find issues early and find an appropriate solution to avoid any business uncertainty. Expanding the business is a good initiative, and if the company follows the rules and regulations, the sustainable operations can be attained.
Introduction
Every organization has to work in the sustainable business environment. The government of the country is responsible for creating the sustainable business environment. Different business operations are to be triggered by some policies and regulations of the government, as it can help to contain the business sustainability as well. Based on the scenario, there are some factors, which are to be considered to address the issues faced by the World Commerce Operations (WCO). Expanding the business into the Pacific Rim is a good idea. However, to solve the different problems, the sustainable strategic considerations must be considered.
The Facts
The World Commerce Operations is looking to expand the business into the Pacific Rim. It is the strategic business plan of the company to increase revenue streams profitability. Entering into the international business transactions is the primary vital consideration by the company, and apparently, it is going to work. It is a fact that selling 1,000,000 hard drives is the first phase in this regard. Target destinations of the company are China and Philippines. Manufacturers of China and Filipino video game consoles can be the key strategic partner of the firm. However, shipment terms such as CIF and FOB are not clear. Also, the change in the monetary policy of the country is also the factor or barrier regarding these issues in international business transactions [1].
Another fact is the inefficient operations of the Thailand Company. The company intends to sell 200 cars. According to the buyer’s operational policy, cars are to be lifted by cranes to save the cost. It resulted in damage to 25 vehicles. Thus, lack of operational efficiency is another issue in this scenario. Another problem is the supply of computer components through the sales representatives for the computer repair company. In this context, the main point is the ineffective and unreliable contact of the sales representatives at the end, many computer components were found guilty, and SR claimed that he is representing the World Commerce Organization. On the other hand, the organization argued that there was not any contract between SR and the company. The agreement with the Japanese company was a good idea for this firm. The company intended to dispatch 2,000 Tonnes of oysters to the port of Japan. The captain of the ship investigated some random samples of oysters and issued a bill of lading. He stated, “In apparent good order and condition.” Finally, it seemed the positive sign for World Commerce Operations [2].
Substantive Knowledge of the Relevant Issues and How They Relate to Sustainability
Relevant to these issues, there are several factors, which are integrated with the business sustainability. For Instance, the government of China and Philippines must have to regulate organizations regarding the shipment terms. Depending on the international business transaction or nature of goods, these organizations must be directed by the government. It is the facilitation for the client. It seems to create the sustainable process of the business, which can help the organizations like World Commerce Organizations to make decisions. Changing monetary policy with the passage of the time is also a big issue, transactions become controversial. Thus, developing the sustainable financial plan along with the prominent flexibility creates the sustainable business environment that can help the company to initiate the operations [3].
Furthermore, creating the product safety is also a prominent business sustainability initiative by the government. Technically, the government of Madripoare should have to keep an eye on the specific product line, which is to be supplied to other countries. Ultimately, organizations are bound by rules and regulations that can enable the product safety.
Sustainability has been integrated with the sales representative contact. For Instance, the government should provide a platform for both parties such as World Commerce Operations and sales representatives to avoid the misunderstanding. It can lead towards the sustainable agreement between parties, and products can be reached to the destinations successfully [4].
Thus, all these issues are related to the business sustainability, and it is necessary to streamline the role of the government.
Discussion (Resolving & creating sustainable business environment)
Four issues have been derived from the scenario, and debate is elaborated along with some applicable laws is as under
Issue 1: FOB/CIF
The first issue is related to FOB/CIF. Selling 1000,000 hard drives to China and Philippines has become controversial due to unclear shipment procedures. Interestingly, international general terms and conditions regarding CIF/FOB are available for firms to negotiate the process. For Instance, relative to the shipment or delivery, “products are to be delivered by a seller to the buyer in bulk and free on-board vessel is to be provided by buyers at the loading terminal” Interestingly, is to be designated by the seller. Thus, it is to ensure that the free on board (FOB) is evident by the buyer to make the decision. It is the applicable law, and if the buyer does not clarify about the vessel for products in bulk, problems may emerge [5].
Another general regulation is to purchase, pay and lift products. This law applies to the buyer. If the buyer is not lifting hard drives a due to the unclear vessel, products can be damaged. Thus, the effectiveness has been mentioned regarding clarity and smoothness in the process by the buyer’s side. Relative to law and the business sustainability, it is necessary for the government to make some interventions to implement these regulations. Clarity of the process in different sales contract regarding vessels (FOB) plays a vital role in the sustainability. Therefore, the implementation of these regulations is essential to make the difference [6].
Issue 2: Inefficient Operations
The applicable law regarding the inefficient loading is quite visible. First, it is to be ensured that before vessels arrive, the buyer should be able to report with the ETA to the loading terminal. The suitable loading process is to be written in the agreement. For instance, loading cars through cranes is a risky process. Accordingly, some alternative method is to be developed or directed by the buyer to enable the product safety. It is important that on the loading, arrival and other, the buyer’s compliance and loading requirements must be fulfilled. The article revolves around the effectiveness and efficiency of cargo, as the buyer is responsible for ensuring the safe loading and product safety [7].
Well, it is related to the business sustainability. It is a fact that any damage to products at the loading terminal may hit the company financially. It is a massive barrier to the business sustainability process. The government of Madripoare may have to work with the company to regulate and improve the loading terminal. The most important thing is to adjust the company to ensure the product safety efficiently. When this international business transaction is met successfully, further operations can also be directed. It seems the business sustainability for World Commerce Operations and the buyer. Interestingly, the intervention of the government even streamlines its role in enabling the business sustainability [8].
Issue 3: Ineffective Contract Agreement
The third issue is the misunderstanding between World Commerce Operations and sales representative. It is a prominent issue, which emerges between these two parties. It has become the primary barrier to the success of the international business transaction. Both parties are claiming that they are not at fault. Thus, before making the contract or agreement, it is necessary to integrate with the international contract law. It is a branch of the private law that protects rights and ownership of each party. Interestingly, it can also be applied to the international sales law. As mentioned, this law protects the rights of both parties. For Instance, the seller must have to deliver high-quality products (Computer Components) to the computer repair company. On the other hand, the buyer has a right to claim different product faults. A pertinent agreement should be signed by both parties to secure their rights. If computer components are faulty, the seller is responsible, as he has to pay against damages [9].
It is related to the sustainability as well. The prominent and secure contact, triggered by the international contract law, may create the healthy relationship between the parties. The successful transaction is a sign of the long-term business sustainability. With the perspective of the government of Madripoare, it is a sound decision to regulate all firms, involved in the international business process, to implement this law. The country can have a good reputation regarding the international business transactions [10].
If we look at the CISG for the breach of contract, it is evident that in Part Three of the sale of goods under section “Obligations of the buyer,” and subsection “Passing of risk.” In “Passing of risk” it is mentioned that the buyer and the seller should show the point at which the risk is passed from the buyer to the seller through using express provision or use an INCO TERM for such purpose. Under the subsection “Exemption from liability to pay damages” the CISG exempts the defective goods as not being exempted as an activity that needs the seller to be exempted from the liability to pay the damages [11].
It is known that an innocent principal is liable for the responsibility of the authorized agents who are acting within the WCO authority and is considered to have made a mistake or fraud of itself directly[12].
Even though the former sales representative and SR does not have any formal contract for an agency-principal relationship with WCO, the repair company is considering the SR as an agent of WCO and WCO knows it, their intention to send the components for sale through SR proves the relationship among SR and WCO. Thus, WCO should provide for the damages and seek a bilateral solution for this issue with the repair company.
Issue 4: In apparent good order and condition
Finally, World Commerce Operations makes the successful international business transaction, as it gets approval from the shipment captain. Now, the issue is how the company makes this transaction successful. Interestingly, Japanese firm these international business dealers reach the same point. They have a good agreement due to the implementation of international contract law, delivery sections, and loading requirements. Both firms set the base for the sustainability. At the time of loading, it was found that all computer components are excellent. Also, complete documentation emerges in the process to make these international business transactions successful [13].
The combination of the role of government and creation of the business sustainability is worthy. The government firms have to work together to enhance the visibility of the international business process. Parties, World Commerce Operations, and Tottori Restaurants Ltd, are integrated with all applicable laws. When both countries incorporate applicable laws, these transactions can be sustained. The most important thing for the government is to evaluate or monitor the process strictly, and it looks the significant contribution to creating the sustainable business environment [14].
Fraud is said to be proved when a false representation has been made without belief in its truth, knowingly, and recklessly. The inspector at the port has been involved in forgery and fraud. The question that whether the loss which has resulted from the false statement at the bill of lading should be borne by the WCO or by the port authorities is important. It is known that an innocent principal is liable for the responsibility of the authorized agents who are acting within the WCO authority and is considered to have made a mistake or fraud of itself directly.
One can say that the Bill of lading is clearly showing that the oysters were good enough at that time. Thus, the charges should not be bear by the WCO. However, if it is looked at ethically, WCO is well aware that the oysters were not good enough and it needs to pay the damages. In both cases, if the truth is known by the buyer or if not; WCO should consider paying for the losses of the buyer and simultaneously identify and raise concerns on the less-training problems of the investigators at the port authorities. [15]
The World Commerce Organization should work with the government to implement and improve its port authority’s activities to reduce the potential for similar issues on the port in future. The workers and investigator at the port should be trained to serve the authorities better.
Other Perspectives
Despite having applicable laws and government interventions, there are many different perspectives to consider. The purpose is to create the business sustainability at the company level. For Instance, in the sustainable business environment, created by the government, World Commerce Organizations must have to build the business on the belief. Different cases indicate the business belief of World Commerce Organization, which is less specific. When dealing with the international business transaction or expansion, the firm must have to localize the business beliefs. It seems the value creation process, which improves the business relations and helps to create the sustainable business environment [16].
The World Commerce Operations must have to take a stance and embrace the change to link with the contemporary business trends. International and local laws are changing. Instead of making it as a top barrier to the business sustainability, the management of the company should come up with the positive approach. Integrating with the change is an essential aspect of the business sustainability, and word commerce organizations must come up with it.
Recommendations
Based on the business scenarios of word commerce organization, there are some recommendations. These recommendations may help the company to emerge in the sustainable business environment
First, the World Commerce Operations has to excel in the specific area. It seems reasonable to contain the business diversity such as selling cars, computer components, and many other things. However, shining in one area can help to address all these issues and ensure the business sustainability. In the modern business era, it is vital to make products, which are to be sold, sustainable regarding cost, price, quality, and delivery. After it, the firm has to streamline the role of the government in creating the suitable environment for the business [17].
Furthermore, the partnership and collaboration with international business partners are sufficient to make the business expansion successful, especially in the Pacific Rim. It is highly recommended that the World Commerce Operations has to find the business partner who has a good reputation. For Instance, considering the sales representative was a big mistake, as it was the intermediary choice. The firm can find the best partner who can work with the company to improve the business process and enhance the international transactions. For the government, creating the flexible business or trade policies is recommended because it allows firms to interact with each other without risks [18].
Conclusion
In the end, it is to conclude that the sustainable business environment is a crucial success factor for international firms. In the sustainable environment, companies like World Commerce Operations streamline international operations. In four global business scenarios, four issues have been identified. The international business is a complicated process, and to make it sustainable applications of laws, products and process standardization, an agreement between parties is essential. The World Commerce Operations must have to think strategically to sell products to other countries. When implementing these recommendations, it is critical to this firm to contain some improvisation. Different solutions to all issues are proposed. However, the contemporary international business needs the change or evolvement with time. It can help to relieve international business barriers.
References in OSCOLA
[1] Allam Ahmed, Managing Knowledge and Innovation for Business Sustainability in Africa (Springer International Publishing 2017).
[2] Maria Alejandra Gonzalez-Perez and Liam Leonard, International Business, Sustainability and Corporate Social Responsibility (Emerald 2013).
[3] Masaaki Kotabe and Preet S Aulakh, Emerging Issues in International Business Research (Edward Elgar 2002).
[4] Kateřina Peterková Mitkidis, Sustainability Clauses in International Business Contracts (1st edn, Eleven International Publishing 2015).
[5] Kiymet Tunca Caliyurt and Ülkü Yüksel, Sustainability and Management (Routledge 2017).
[6] Rob Van Tulder, Roger Strange and Alain Verbeke, International Business and Sustainable Development (Emerald Group Publishing Limited 2014).
[7] Rob Van Tulder, Roger Strange and Alain Verbeke, International Business and Sustainable Development (Emerald Group Publishing Limited 2014).
[8] Kateřina Peterková Mitkidis, Sustainability Clauses in International Business Contracts (1st edn, Eleven International Publishing 2015).
[9] Masaaki Kotabe and Preet S Aulakh, Emerging Issues in International Business Research (Edward Elgar 2002).
[10] Allam Ahmed, Managing Knowledge and Innovation for Business Sustainability in Africa (Springer International Publishing 2017).
[11] ‘United Nations Convention on Contracts for the International Sale of Goods’ (uncitral.org, 2010) <https://www.uncitral.org/pdf/english/texts/sales/cisg/V1056997-CISG-e-book.pdf> accessed 2 May 2018
[12] Chartering Team, ‘Forgeries (Fraud and Bills of Lading.)’ (Ship Inspection, 2018) <http://www.shipinspection.eu/index.php/chartering-terms/72-f/4648-forgeries-fraud-and-bills-of-lading> accessed 2 May 2018.
[13] Maria Alejandra Gonzalez-Perez and Liam Leonard, International Business, Sustainability and Corporate Social Responsibility (Emerald 2013).
[14] Kateřina Peterková Mitkidis, Sustainability Clauses In International Business Contracts (1st edn, Eleven International Publishing 2015).
[15] Chartering Team, ‘Forgeries (Fraud and Bills of Lading.)’ (Ship Inspection, 2018) <http://www.shipinspection.eu/index.php/chartering-terms/72-f/4648-forgeries-fraud-and-bills-of-lading> accessed 2 May 2018.
[16] Maria Alejandra Gonzalez-Perez and Liam Leonard, International Business, Sustainability and Corporate Social Responsibility (Emerald 2013).
[17] Maria Alejandra Gonzalez-Perez and Liam Leonard, International Business, Sustainability and Corporate Social Responsibility (Emerald 2013).
[18] Rob Van Tulder, Roger Strange and Alain Verbeke, International Business and Sustainable Development (Emerald Group Publishing Limited 2014).
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