Migration from less developed economies and its effect on corporate and individual international business performance

Our Special Initiative: Immigration and Immigrant Integration Through Trade

Migration from less developed economies and its effect on corporate and individual international business performance

Michael R. Czinkota

Gary Knight

Zaheer Khan


Project Abstract:

Professors Czinkota of Georgetown University, Knight of Williamette University and Khan of the University of Kent have initiated theories on entry strategies into international markets. Czinkota co-developed the ‘stage theory of internationalization’ where firms typically enter markets abroad over two years. Knight co-developed the ‘born global’ theory, where improved communication enhances access to international markets right from firm foundation. Khan specializes in trade from emerging economies towards wealthy nations. We intend to marry our theories with analyses of immigrants and immigration to clarify immigrant contribution to international trade.

Globalization has been associated with widespread migration of people moving from less developed to developed economies for political, economic, or social reasons. Business survival is a major factor that predicts the success of immigrant entrepreneurs and of immigrants generally, in the U.S. Recent statistics indicated that more than 12 percent of residents in the U.S. are immigrants. Remittances sent home by migrants are substantial, and often represent a significant proportion of home country gross national product. In general, migrants play important roles in their host countries. For example, migrants in the U.S. operate as entrepreneurs, investors in capital markets, tourists, volunteers, and advocates. They bring various assets, resources, international experience, social networks, a sense of patriotism and social cohesion, bridges to foreign investors, and entrepreneurial knowledge and experience. Many such migrants draw on resources from their home and host countries to economically adapt to the U.S., and launch new businesses by becoming entrepreneurs. These transnational entrepreneurs often launch businesses that involve trade and investment between the United States and the migrants’ home countries

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Leadership, Corporate Social Responsibility and Sustainability, Part 5: Sustainability


Just like the broader term of corporate social responsibility, sustainability also carries multiple meanings to different audiences. Inevitably, groups and organizations that are interested in specific issues related to the environment tend to define the issue in narrow  terms. It is helpful to understand the term in its most general sense, which often involves some sense of marrying commercial needs  with preserving the natural environment for the future. Several  definitions can help. The 1986 World Commission on Environment and Development (Brundt­ land Commission) definition of sustainable development could reasonably be applied to sustainable business practices: “development that meets the needs of  the present without compromising the ability of future generations to meet their own needs.” A simple but powerful expression is that of Robert Gillman: “do unto  future generations  as you would  have them  do unto you.”

Several  definitions can help. The1986 World Commission on Environment and Development (Brundt­ land Commission) definition of sustainable development could reasonably be applied to sustainable business practices: “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”  A simple but powerful expression is that of Robert Gillman: “do unto  future generations  as you would  have them do unto you.”

Growing  population, increased urbanization and industrialization  around the world, and dramatic increases in production and consumption all have a sig­nificant impact upon the environment. The result has led to increased pressures from nongovernmental organizations and multilateral institutions to create greater awareness and to improve practices by governments, businesses, and individuals to lessen the detrimental impact. This involvement sometimes raises political and philosophical disagreements in regard to  the extent of problems and the nature of the proposed solutions. An example of this is the 1997 Kyoto Protocol, an international agreement linked to the United Nations Framework Convention on Climate Change. This agreement sets binding targets for industrialized countries and the European Community for reducing national  levels of greenhouse gas emissions. The United States declined to join this agreement because it excludes major developing economies like China, India, and Brazil, which are also major greenhouse gas emitters.

Controversy continues over whether these greenhouse gases  are causing  climate change or global warming. Within individual nations,  political disagree­ments over the wisdom and necessity of “green” policies and practices often show varying opinions about whether “green is good.” For example, the EU announced a carbon emissions tax on all airlines flying  into Europe. This ruling has raised protests from the U.S., Indian, Russian, and  Chinese governments and those of other countries as well. In another example, U.S. and European regulations that set new standards for the amount of light emitted per watt of power used effectively require the use of compact fluorescent bulbs and make incandescent light bulbs obsolete. Subsequently, concerns have emerged about mercury content in the new bulbs and how to dispose of them, as well as whether they are as effective in illumination. As a result, some people are hoard­ing old lightbulbs. Similar issues and a secondary market in old toilets have resulted  from regulations  on  low-flow  toilets  to save water.

International marketers will need to pay attention to multiple regulations governing the environmental impact of products. The EU has implemented REACH (Registration, Evaluation, Authorization, and Restriction of Chemical substances), a set of broad-reaching regulations on the use of chemicals, to motivate businesses to exclude dangerous chemicals like cadmium  in products  such as personal computers and cell phones.

Where problems exist, business opportunities may exist as well. As we have outlined in this chapter, companies like  IBM,  GE, and  Siemens are  adjusting their corporate strategies and their product offerings to address some of the planet’s environmental challenges and governmental plans to tackle them. In President Obama’s 2011 State of the Union address, he called for the United States to generate 80 percent of its electricity from clean energy sources by 2035. Depending upon the evolving definition of “clean energy,” this goal may mean good opportunity for companies that have products and services in renew­able energies, nuclear power, efficient natural  gas,  coal  with  carbon  capture and sequestration, wind power, and solar energy. Some businesses objected, contending that the goal was unachievable because of existing regulatory barriers. Business groups and environmental organizations in many countries often clash over various regulations that affect access to energy supplies. Even “clean energy”  can pose  environmental disputes as illustrated by the issues of shale gas drilling and pipelines in the United States and by the movement away from  nuclear  power  in Germany.

Leadership, Corporate Social Responsibility and Sustainability, Part 3: Strategy Focus

Early corporate citizenship initiatives were often directed at supporting commu­nity causes ranging from charitable organizations to cultural institutions like municipal symphonies and operas. Companies have been historically helpful in developing the cultural infrastructure of many communities. Whether these cor­porate philanthropy efforts were beneficial to the company or only to selected individuals is very subjective. However, many of these early efforts were not scrutinized for their contribution to the strategic objectives of the firm. Michael E. Porter and Mark R. Kramer have argued that a company needs to choose its social initiatives strategically. They have advanced the concept of shared value, which they define as “policies and operating practices that enhance the competi­tiveness of a company while simultaneously advancing the economic and social conditions in the communities in which it operates. Shared value creation focuses on identifying and expanding the connections between societal and eco­nomic programs.”

Porter and Kramer identify three approaches that apply to international marketers:

(1) delivering attractive products that are truly beneficial to society; (2) removing problems in the supply chain that are both costly and socially detrimental, such as reducing. greenhouse gasses; and (3) enabling local cluster development to help communities become more competitive.

They argue that “we need a more sophisticated form of capitalism, one imbued with a social purpose. But that purpose should arise not out of charity but out of a deeper understanding of competition and economic value creation.” The best interna­tional marketers are driven by the desire to create value and improve their com­petitive positions, so shared value becomes the right and smart thing to do.