EXPORT ETHICS
Jushika Sanjay Sachdev, Research Scholar Dr. Manisha Pandey, RU
Abstract:- The study considers the export relevant data alongside the ethical concerns attached with it. The trading in any form has to abide by the set of moral rules and regulations in order to its sustainability and in order to gain that, it’s a must to not only consider the moral ethics or principles but to follow them in all its measures. The necessity of ethical code of conduct is explained in order with exports and its promotional activities undertaken thereby.
Keywords: Exports, ethical exports, ethical trade, unethical behaviours.
1. INTRODUCTION
Exports in general is trading. To make this vast this includes trading of goods and services on a large scale enhances marketing opportunities in relevant to country’s economy as a whole. Usual being goods and services that are produced in one country and sold to buyers in other, fostering foreign trade and making it beneficial for both the parties.
Exporting into foreign markets can often reduce per-unit costs by expanding operations to meet increased demand. Finally, companies that export into foreign markets gain new knowledge and experience that may allow the discovery of new technologies, marketing practices and insights into foreign competitors.
Ethics: Ethics are the moral principles that govern a person’s behaviour or the conducting of an activity. A particular system of values and principles of conduct, especially one held by a specified person or society.
Export Ethics: Moral rules of conduct governing the trading of goods and services so as to ascertain the trading business in a socially acceptable form emphasizing on moral principles.
2. REVIEW OF LITERATURE
After the ‘Make In India’ initiative by Modi government, Indian exports have shown a tremendous growth and development specially with their schemes that have been organised and implemented along with the financial aid and other relevant benefits entitled for its futuristic scope. Events taking place in the world, particularly in foreign trade, shows how sensitive developed countries have become for preserving their shares in foreign trade. In order to improve it for all countries specially for the developing countries, the country must have a strong economy. The realised structural investment through inducement policies and particularly supporting export, the competitive advantage can rise in the long run.
Exports are determined to cause growth by raising national income of the country and decreasing cost.
3. NEED FOR EXPORTS
Export is an exigency for the world topmost reason being to uplift the economy at all its forms.
3.1 Foreign Exchange
The exchange rate, the price of one currency in terms of another, helps to determine a nation’s economic health and hence the well being of all the people residing in it. We live in a world where the trading of goods and services happens for money. Today we live in a world where the exchange of goods and services happens for money. This money is in the form of a particular currency. Now, the value of one currency will not be the same as that of another and this is where the need for foreign exchange arises. This is why Foreign Currency is the spine of international investments and global trading. Without it, it would be nearly impossible to determine the value of goods and services imported and exported by different countries to each other. And without having the possibility to trade, companies that rely on overseas resources and talent would be completely crippled. Also, there would
be major problems for foreign travellers to buy or sell anything while abroad thereby making foreign exchange so important.
3.2 To Motivate Organisations to Export
In order to motivate organisations to export and earn precious foreign exchange, governments offer certain incentives. These incentives help reduce the tax burden of the exporters and also achieve a competitive price- edge for their products in foreign markets.
However, being a member of WTO, each country has to ensure that the incentives offered by its government do not give an unfair advantage to the exporters. Thus, no country is to give special trading advantages to another or to discriminate against its all nations stand on an equal basis and share the benefits of any move towards lower trade barriers (branch). Also, all export incentives have to comply with WTO norms and should be in line with its various principles.
3.3 To Promote Interests of Indian Exporters and Keeping Commitment of WTO
In India, the framework of export incentives in the form of duty exemption and remission schemes has been devised keeping in mind the interests of exporters as well as the commitments India has made to WTO.
The Duty Exemption Scheme helps exporters import duty-free inputs required for manufacturing export products. The Duty Remission Schemes enable post-exports replenishment/remission of duty on inputs.
3.4 To Import Capital Goods
The export promotion capital goods (EPCG) scheme enables exporters to import capital goods at concessional rate of duty and suitable export obligation.
3.5 To Correct Unfavourable Balance of Trade
During the period of planning, except two years, all other years have witnessed unfavourable balance of trade. It not only reduced the foreign exchange reserves of India but also made it difficult to achieve plan targets. Successful completion of plans, therefore, calls for turning of unfavourable balance of trade into favourable one which requires increase in exports.
3.6 Importance of Ethical Trade
1. It reduces risk when you trade in an ethical way.
2. Sound ethical culture helps sustain business relationships with customers and employees.
3. Business driven global values.
4. Ethical trade is not just about providing an ethical product but it’s about creating an ethical sound business.
5. A proactive ethical strategy is also a strategy for reducing risk.
6. Creating, monitoring and updating systems costs money, but this is as much an investment as an advertising campaign or the HR strategy.
4. THE EXPORT ETHICAL GAP
The aim of earning more and growing in total aspect to gain more profits and market share has raised the controversial bar of moral principles and values to be followed in exports.
1) Smuggling: Smugglers bring in illegal (i.e. goods supplies in excess of the quota).
Other entrepreneurs may try to incorporate the goods subject to the quotas into import goods not subject to the quota. These market responses may limit government’s freedom of action in setting import quotas.
2) Distortion of ex-im Relationships: The development of harmonious ex-im relationships is hindered by many problems majorly caused by the extent of geographical and cultural distance separating the parties involved. Having dissimilar values is responsible for understanding and interpreting issues concerning the working relationship in a different way.
3) Unethical Marketing Practices: Concealing vital information about the product, withdrawing promises related to payment terms, delivering goods that were not ordered and promoting benefits that are not genuine are some of the many forms of unethical marketing practices used by sellers.
4.1 Objective
Clear objective of the study was to highlight the exports growth and its importance which is as important as following its ethical and moral values.
Any business being profitable or non-profitable has to compulsorily abide by the ethical code of conduct in order to assure its long term survival. In a vast approach, exports indirectly signify the country’s morality towards others. The more it conducts its activities in full concern to ethics, the more it gains credibility worldwide. To make this statement powerful, it’s all on the government. When i say this, it clearly directs towards the governmental policies, the rules and regulations, economy concerns and also how well the government handles the public and public trading concerns. Sometimes the export is discouraged or demoted because of strict government laws. Also when the government is too liberal towards the trading that it even forgets to abide by certain laid policies by the export promotion councils.
As per the research, the main objective is to empower the ethical code of conduct not only in exports but in every form of trading activity because all of the trading practices, being conducted directly or indirectly are directed toward exports. To fill the gap between the export and its ethics to be followed could be filled when people are self directed to the moral values.
The foremost objective of the study is to objectify the export governing rules along with the exporting activities. Export has this drastic growth levels that is capable enough to fill the financial needs of one’s country. The unethical ways of ex-im trading makes difficult to vast the area of exports. The export policy, export studies, export trade itself, export governing laws and rules and exporters must now work to be more inclined towards the ethical exports in order to achieve the absolute objective of export business with ethics.
5. RESEARCH METHODOLOGY
The methods and tools that were used in order to give this research a meaningful content were.
5.1 Government Publications
The Government of India’s authenticated platform of trade i.e. Ministry of commerce and industry has all the detailed and elaborated data and configurations in relevant to imports and exports undermining the list of commodities and its growth percentage in the relevant years. It even shows the foreign trade performance analysis along with the graphical display of merchandise and services trade data.
5.2 Export Journals
Detailed about export promotion programmes and government export policies. Analysis of various modes of entry, and modes of entry other than exporting. Journals also based on the ethical rules to be followed while exporting to gain and grow for the long run survival.
5.3 Articles
Articles specialised in exports since years and the complications we face in exports along with keeping up with the cultural gaps and geographical gaps. Articles on how the exports have taken a bigger turn towards trading. The export promotions schemes that have now increased at a pace to promote exports on a larger scale.
5.4 Research Papers
Many published research papers on export related articles diversifying exports and its components were researched. With the growing trend of green marketing, the research papers on green export marketing are now published with a socialistic welfare view.
Everything that is in favour of sustainable development is wildly accepted and followed.
5.5 Government Past Records
The past years records that helps analysing the export culture, export database and export related minute information in order to form a base for the research findings.
6. CONCLUSION
Since the research shows that buyer-seller relationships are caught in a web of inter- dependencies at various network levels. Our study has demonstrated that differences in values between importers and exporters are indeed responsible for increasing the unethicality in the marketing behaviour of the latter as perceived by the former. Exporters’
unethical marketing practices were also shown to seriously harm the quality of their working relationship with importers. However, having a similar strength in value systems and sharing similar ethical codes is conducive toward fostering relationship quality. The importer-exporter relationship quality will ultimately have a positive effect on its performance. The harmful effects of unethical marketing behaviour on the exporter- importer relationship quality identified in this study are a particular cause of concern, especially in view of the fact that an increasing number of firms are currently engaged in international business activities.
Importers should therefore carefully monitor the marketing practices of their foreign suppliers and be ready to take immediate corrective action should any unethical issue arise in the relationship. Since the role of partners in a business relationship is not one of surveillance or spying on one other, but of collaboration and obtaining mutual benefits, it is advisable to establish at the outset a commonly acceptable code of ethics, which demonstrates awareness of ethical issues and indicates how best to deal with them.
Building the working relationship on a sound ethical base is of paramount importance to guarantee long-term harmony
6.1 Suggestions
This study can contribute to the international business discipline in a number of ways:
first, it has stressed the dangers imposed by value differences between the interacting parties in a business relationship toward promoting unethical marketing behaviour;
second, it has established a link between two important streams of research, namely ethical marketing and relationship management; third, it has transferred crucial marketing/
management issues examined within a domestic market domain to an international business setting; fourth, it has revealed the important role of similarity in both value strength and ethical codes in building harmonious business relationships; fifth, it has demonstrated the critical role of relationship quality in business interactions in achieving highly-performed working relationships.
The fact that dissimilar national, corporate, and personal values provide fertile ground for the development of unethical marketing practices has serious implications for properly selecting and handling foreign suppliers by importers. Hence, prior to embarking on a purchasing venture with an exporter, it is important for an importer to closely examine his/her value profile (at the national, corporate, and personal level) and determine how compatible it is with his/her own. Such an analysis will help to minimize the chances of engaging in a relationship that is highly likely to be catastrophic because of unethical marketing practices on the part of the exporter. It will also help the importer to be wary of and immediately spot any potential unethical behaviour by the foreign partner, if for some reason (e.g., unique products, low purchasing costs, long-term financial gains) the importer considers a business venture important in spite of the existence of value differences.
Since the role of partners in a business relationship is not one of surveillance or spying on one other, but of collaboration and obtaining mutual benefits, it is advisable to establish at the outset a commonly acceptable code of ethics, which demonstrates awareness of ethical issues and indicates how best to deal with them. Building the working relationship on a sound ethical base is of paramount importance to guarantee long-term harmony.
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