In Need of Honorable Merchants

Michael Czinkota researches international marketing issues at Georgetown University. He served in trade policy positions in the George H.W. Bush and Ronald Reagan administrations. His International Marketing text (with I. Ronkainen) is now in its 10th edition. Kimberly Boeckmann participated in drafting this work.

A powerful concept in today’s international marketing field focuses on re-establishing honorable practices in the workplace and, more importantly, across borders.

The emphasis on the Honorable Merchant is a renewed issue in Europe, bringing fresh life to old thoughts. What exactly is an Honorable Merchant? It dates back at least to medieval history and ancient mercantile practices, where trust was paramount for achieving success.  “Honorable practices” are rules established to guide merchants in conducting international business. For example, Berhold v. Regensburg admonished in 1210 that merchants should always use accurate measures and weights, highlighting Honorable practices as a priority in society. These rules go all the way back to Proverbs (11:1), which specifically address merchants: “A false balance is an abomination to the Lord, but a just weight is his delight.” The New Testament, Matthew 19:23-24, cites Jesus as saying ‘it is easier for a camel to go through the eye of a needle than for someone who is rich to enter the kingdom of God’. Later on, the Quran resolves that charging interest is inappropriate and even sinful (Quran 3:130-131).  In Chinese society, the role of a merchant was seen as a necessary evil, far below more exalted societal roles, such as imperial officials.

Honor also implied accountability beyond the merchants themselves, extending to their leaders. In the early 15th century, creditors from abroad requested that citizens convince their nobility to pay their trade debts. If not, they threatened attack not only on the noblemen and cities themselves, but every merchant from those cities.

A summary then indicates:

  1. The profession of merchants often has a dubious reputation, even more so internationally.
  2. Mixed emotions are prevalent, since merchants can either help or hinder through their work
  3. Internationally, merchants may be at a disadvantage due to their foreignness. Their background and differences could detract from success in business
  4. International merchants are attractive since they bring choice to market, however they still may displace domestic relationships
  5. To overcome this psychic distance, merchants must compensate for their shortcomings

Merchants have long faced a variety of objections, making it difficult to climb the path to trust. Trust can facilitate investments in relationship assets, encourage information sharing, and lower transaction costs. However, Honorable practices have developed over time, by building long-term customer relationships. We believe that the outcome of Honorable behavior will be the construction of Trust Bridges.

An Honorable Merchant’s reputation can be developed by highlighting commonalities and shared experiences, which establish a set of standards for international business. Exposing two parties to common conditions and values helps establish connectivity, warmth and trust more rapidly than if they had no similar experiences. Through a combination of collaboration, symposia, conferences, and courses, partners can accredit and certify people or companies through a database of Trust Bridges.

In its annual Global Marketing conference, held recently in Cancun, the American Marketing Association sought to help in developing the honorable merchant concept. Today’s critical characteristics of an Honorable Merchant must be to 1) build trust, 2) demonstrate corporate social responsibility (CSR), and 3) offer integrity and reliability, i.e. just because something can be done, the Honorable Merchant will not necessarily do it. All this needs to occur simultaneously in the realms of academia, business, and policy.

An essential application of a Trust Bridge exists for alumni of a university. A university’s ability to establish an extraordinary environment enables the building of common bridges, anchored in similar life experiences.  The most effective way to develop strong relationships is to highlight what each party brings to the table. Team work, networking and reputation will increasingly become the main factor in choosing to attend a brick and mortar university, even after the web and internet provide alternatives to traditional education. However, for such efforts to be victorious, they must go beyond the mere transfer of information and help interested parties collaborate and connect.

Familiarity brings a fast track to relationships. A data base of shared experiences can be instrumental in fostering such familiarity. A greater capacity for trust is developed through understanding, which shapes honorable relationships. Honorable practices should again become the expectation and norm.

Guiding Principles of the Honorable Merchant

The Honorable Merchant as a Person:

  • has a tolerant and liberal attitude
  • keeps his/her own word with handshake as a binding act
  • develops commercial judgement capabilities

The Honorable Merchant in His/Her Company:                                                             Creating conditions for honorable behavior

  • acts as a role model through all actions
  • promotes honorable behavior in his business
  • aims at long-term and sustainable business objectives

The Honorable Merchant in Society and the Economy:                                          Comprehending and creating the framework for honorable behavior

  • heeds the principle of equality and good faith
  • recognizes and takes responsibility for the economic and social order
  • always advocates his values in both domestic and foreign trade