The times, in Europe, they are a-changin’

From The Hill

afd_germany_1The German elections are over, and for a brief moment, it looks like all is stable. But make no mistake, this is only the eye of the storm. Germany has already shifted away from the current leadership.

German Chancellor Angela Merkel stated that she has done nothing wrong. While that is true, there are many things she hasn’t done right. Society and its problematics around the world have moved on, circumventing traditional politics and politicians.

From a long-term analytical business perspective, politics requires a new direction. The parties in power may elegantly gloss over losing 10 percentage points in voter support. They talk about how the voters have made a mistake; how all it takes are better explanations and how all these inequities will be rectified shortly. How wrong they are!

Perceptions change. Research by Mintel reports that many consumers now judge soap bars to be a haven for bacteria. Similarly, voters now judge political insiders to be parasites to progress. Our work, which systematically tracks business behavior and expectations over the past 30 years, indicates new core values for voters.

Traditional dimensions of politics and individuals have four key dimensions, illustrated by the four legs of a stool. First is competition, which determines the approach to progress — one party achieves “the winner takes all,” others meekly fall in line for the droppings from the table.

Second is the establishment and management of risk, where steely nerves and occasional disasters determine lifestyle. Then comes profit, which accounts for success in tangible form. Finally, the fourth leg of the stool is property rights, which assure innovators of their return on investments. There now is a simultaneous splintering of all four legs, which inhibits successful conduct of direction.

A new stool with new legs has recently emerged, these changes are crucial in understanding society. First is truthfulness. Firms and voters detest fake news, insincere excuses and thoughtless comments. When the shadows of unreality obscure one’s outlook, exposed people extract a penalty.

Second is simplicity. Employees and citizens want to understand how relationships work and interact. Without that, it is hard to provide or accept truthfulness. Then there is participation, permitting insight beyond simple observation and offering an active role in shaping the conditions which confront one’s life.

The fourth leg is responsibility — going far beyond customary short memories and the traditional pleading of ignorance. The new drive says: “We are here and, if not, we are coming.”

Just as in America, European voters are beginning to be energized by the new legs of the stool and their new criteria. They expect new directions that negate tradition. Judging by shifts in Britain and Spain, stability in Germany may not be that assured.

It’s also not just the money or even economic growth that matter most. Known quantity may give way to even more quality and a rise of local criteria. “Merkelism” will be substituted for Mercantilism. German economic power may be repulsed by regions seeking to regain their cultural self-determination.

The U.S. emphasis on re-shoring, and the enhancing and encouraging of local production is likely a portent of the new Europe, which perhaps reduces Germany from the “King of Exports” to a mere prince. More export-supporting banks will permeate Europe, accompanied by increases in protectionism.

There are still many options for tariff and non-tariff barriers. Within, but particularly outside of the EU, one can expect growing restrictions in both capital and labor flows and a rise of sanctions. Vested interests will become more visible, and provide new decision frameworks.

All that requires a new team. Low-profile politicians will inexorably move onto the new pedestal. Andreas Pinkwart (FDP) and Karl-Theodor zu Guttenberg (CSU/CSIS) are two who get it. Bob Dylan may have written the song half a century ago, but now more than eve,r we get key guidance from, “The times, they are a-changing.” The change is with us already — the new stool will give us new rules of success and new directors.

Michael Czinkota (czinkotm@georgetown.edu) teaches international business and trade at Georgetown University’s McDonough School of Business and the University of Kent. His key book is “International Marketing” 10th ed. (with Ilkka Ronkainen), CENGAGE.

Assault at the Cathedral

On New Year’s Eve, there were mass attacks on women in Cologne, Germany. More than a thousand young men, many of them with an apparent migration background, congregated next to the famous cathedral of Cologne where they assaulted, groped and even raped women passing by. Local police, far outnumbered, did not intervene in the mayhem. In the days to follow, police, press and government tried to downplay the disaster, in order to avoid controversy about migrants, of which Germany admitted more than one million in 2015, with many more to come.

Since then, statements by police who had been ordered to stand down,  by eye witnesses and by social media, have emboldened the victims to file more than 625 criminal complaints with 40% of them related to sexual assault. Many of the alleged attackers are Arab or North African, which has led to severe discontent with the government and its migration policy. There have been a series of protests, particularly in eastern Germany, blaming Chancellor Angela Merkel’s government and her open-door refugee policies.

Beyond the very serious criminal charges which are for the police and judiciary to resolve there additional serious questions. First, are European countries such as Germany ready to accept so many refugees both mentally and physically? Second, given the huge number of migrants still in motion, who will provide them with a domicile? Third, and most importantly, the desire for temporary tranquility has invalidated the fight for the equality of women, shod the aversion  of violence against women, and done so at a dangerous cost to societal transparency and progress.

For decades, even centuries, western countries have been trading partners with authoritarian regimes in the Middle East, selling weapons, automobiles and other lucrative products. But the encouragement of an Arab Spring has led mainly to an Arab Fall. Yet, a large financial overhang, mainly resulting from international business, has not led to an assimilation of values and behavior. Instead many funds are used to help the distribution of fierce rhetoric, giving rise to Osama bin Laden and many other extremists. These developments are paired with an asymmetry of political correctness in the Western World, leading to new rope which the victim sells to its miscreant.

With decreasing demands for mutual integration, concurrently rising migration and outdistanced procreation, there are fewer viable landing strips for students, women and willing economic participants.

Right now, many of the migrants seek out primarily Germany and Sweden as asylum territories, which is understandable in light of the accommodations and benefits offered. But there are also important cultural milestones and preferences of governments and citizens who receive the human wave. Integration means that hosts learn more about their visitors, but also requires the new arrivals to accept key standards and expectations of their hosts. Though large immigration is likely to dilute rigid norms, it also must lead to asymptotic movement towards established standards.

The EU,  taking on a leadership role consistent with the Treaty of Lisbon,  should pr0otect the human rights of asylum seekers, but also has  right to determine where this protection should take place. For example, the Middle East and Africa have many locations where refugees can be housed, fed and clothed, and protected. Countries such as China and India could develop entire settlement policies for the resolution of a global problem. These are not meant to create new colonies, but rather endorse the establishment of pop-up protectorates, to temporarily provide succor, shelter and peace to refugees.

Third, and perhaps most chillingly because it can set the future rails for disaster, is the failure of the public media to distribute honest information rapidly. An almost week-long delay of media reports was broken only when too many other sources broke the mantra of keeping bad news about migrants out of the public spotlight. This is wrong! Silence is a blow to the victims of violence, and lets them be hunted like game. Women deserve better.

The violent, brutal and sexist treatment of women must be combated radically.The event in Cologne reveals a major flaw societal shortcoming which cannot be tolerated. Germany is an internationalized country due to the composition of its population and its dependence on foreign trade. If it wishes to continue with its international leadership role, Germany must recognize that such role is one of immersion into the world which must result in simultaneous juridical, social and economic leadership. Female equality is a crucial entitlement for more than half of the population. To declare otherwise is wrong for the native locals as well for the wave of newly arriving migrants. The events in Cologne must not become the opening act for continued misery and disrepute.

The attempt to muffle the powerless laments of the victims with the blanket of public silence is most treacherous. One should not cry ‘fire’ in a cinema, but doing so is  encouraged when the flames are in the roof. The suggestors, the targets of the suggestions as well as the self-motivated absconders with truthful information must recognize how their behavior has fertilized the ground for future misinformation and knowledge abuse. Effective steps must be taken to truly make a difference. It is time for such action with specific details clearly spelled out by democratic transparency. As was already promulgated by St. John:” And you will know the truth and the truth will make you free.”

Professor Czinkota presents international marketing at Georgetown University in Washington D.C. 

Weekly Update: Top 5 International Business News Trends

The latest International Business Headlines from last week are reported to you below. Please report to their individual websites to read the full articles. Check for updates every Monday.

1.  Cyprus’ president says he expects international creditors’ latest review to approve the country’s handling of its bailout program.

http://www.businessweek.com/ap/2013-10-28/cyprus-president-expects-positive-bailout-review

2. A technological revolution is sweeping across Africa, bringing with it deep Internet penetration and exploding rates of smartphone usage.

http://www.newsweek.com/africa-start-ups-swarm-continent-388

3. The proportion of women commanding managing director roles in London has doubled

http://rt.com/business/london-female-gender-gap-844/

4. The U.S. may have monitored German Chancellor Angela Merkel for over a decade according to reports from NSA leaker Edward Snowden.

http://www.washingtonpost.com/world/europe/merkel-may-have-been-monitored-by-us-since-2002-magazine-reports/2013/10/27/7b95661e-3f32-11e3-b028-de922d7a3f47_story.html

5. For the first time in 126 years, the Vatican Bank published an annual report in an attempt to be more transparent and divert allegations of corruption.

http://www.newsweek.com/pope-francis-opens-books-first-ever-vatican-bank-report-shows-big-profits-74