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.

AMA SIG Honorable Merchant Conference 2014: A Great Success!

The recently concluded 2014 American Marketing Association Special Interest Group conference on the Honorable Merchant and International Marketing was a great success! We had an excellent turnout of 30 participants representing nearly every continent at the Dreams Resort and Spa hotel in Cancun, Mexico. The 2014 conference was held from Wednesday, April 16th to Saturday, April 19th. The diversity of international participants cultivated unique research topics on the area of the Honorable Merchant and allowed for stimulating discussion to ensue. Research papers ranged from comparing Marketers to the Devil to cheating at Universities and Honorable practices for sustainable cocoa supply. The participants completed three rounds of Delphi Questionnaires on a wide range of topics. The results will be published later this year.

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To view more conference photos click here.

The Honorable Merchant in International Marketing Sessions 3-4

——Friday, April 18—— 

All sessions will be held in the Ballroom – Cielo 

9:00 – 10:00 Session 3: Meet the Editors 

Moderator: Rüdiger Kaufmann (University of Nicosia)

Mary Teagarten, Editor in Chief (Thunderbird International Business Review)

David Stewart, Editor (Journal of Public Policy and Marketing)

David Griffith, Former Editor (Journal of International Marketing)

10:00 – 10:15 Break 6

10:15 – 11:45 Session 4: The Honorable Merchant and International Action 

Moderator: Suraksha Gupta (Brunel University)

Relationship factor as the key to Sustainable Export Marketing with Asia 

Anura Amarasena (Swinburne University) and Geoffrey Chow (Swinburne University)

Online Retailing Paired with Kirana – A Formidable Combination for emerging Markets 

Piyush Kumar Sinha (IIM Ahmedabad) and Srikant Gokhale (IIM Ahmedabad)

Investigating Quality Perceptions of Foreign Services by Chinese Consumers 

Subir Bandyopadhyay (Indiana University)

The International Dive of Inter-Generational New Products: Measures, Patterns, and Predictive Model 

Javier Palacios Fenech (Universidad Adolfo Ibañez) and Gerard Tellis (Universidad Adolfo Ibañez)

The evolution of scholarly research on international marketing managers’ behavior of exporters and marketing relationships: A critical discussion on the ethical profile and competences of international marketing managers 

George S. Spais (Graduate Technological Educational Institute of Western Greece) and Rüdiger Kaufmann (University of Nicosia)

11:45 – 13:15 Lunch Break (at leisure throughout the resort) 

13:15 – 13:45 Keynote: Keeping Trust on the Policy Side 

Major General (ret.) Al Zapanta (President & CEO, U.S. – Mexico Chamber of Commerce)

Ten Commandments Of The Honorable Merchant

In September of 2010 Berlin Museum of Economics and Business administration: scholars rummaged up a yellowed cardboard with the inscription “The Honorable Merchant” in a dusty chamber named “Department of Stored Concepts.” Inside, they detected 10 tablets, each inscribed with a single sentence in ancient handwriting.

  • One goes: “The honorable merchant respects the interests of the owners.”
  • Another one: “The honorable merchant supports the common welfare in the society.”
  • This one’s also nice: “The honorable merchant aims his actions to virtues that create long-term confidence.”

Certainly, anybody today will define current incidents on each of these old-fashioned Words-Of-Wisdom: Hostile takeoversHouse banking scandalHealth care fraud … you can find seemingly endless lists of considerable companies that are convicted of felony offenses, and they’re still in business – or to say it in better words: still busy in corporate crime. In today’s markets economy the antiquated doctrines above seem to be not very useful. The moldy cardboard is probably at the right place, slowly rotting in the department of stored concepts.

Are practices that are morally reprehensible the contemporary vision of our global management caste?

The term “The Honorable Merchant” originates from the 12th century, shaped in the German Hanseatic League and Italy. It was a guiding principle in those ages, but buried in oblivion for the last centuries. Currently it is on everyone’s lips, i.e. the Humboldt University in Berlin (the guys who found the cardboard) now seriously wants to reintroduce the “Virtues Of The Honorable Merchant” in today’s faculties for Management and Business economics — as they declare, not for moral reasons, but because of the stability of society!

My two cents: As an entrepreneur, one should always be conscious about the virtues of decent trade and correct action, anyway. Who is cheating has no customers. But I’m just a bod, the man on the street.

Author: Mathias Roth
Published: September 29, 2010 at 5:32 pm

The Honorable Merchant in International Marketing Session 2

——Thursday, April 17——
All sessions will be held in the Salón Cielo

14:30 – 16:00

Session 2: The Honorable Merchant and Industrial Leadership Moderator: Frank Franzak (Virginia Commonwealth University)
A Study of Customer Life Time Value and its Impact on Customer Retention
Kavita Sharma (Delhi University) and Arshi Zareen (Delhi University)

An Analysis of Trust Based Customer Relationships
Kavita Sharma (Delhi University) and Swati Gupta (Delhi University)

Effect of Socially responsible behaviour of a firm on brand trust and brand loyalty
Auhud Gronfula (Brunel University), Suraksha Gupta (Brunel University) and Vishanth Weerakody (Brunel University)

Influence of gender on business negotiations in emerging countries
Suraksha Gupta (Brunel University), Shyama Ramani (Brunel University), Nick Lee (Brunel University) and John Rudd (Brunel University)
16:00 – 16:15 Break

16:15 – 17:15 Workshop II – Social Media Concerns: Balancing Competing Demands
Leader: Camille Schuster (California State University)

17:15 – 17:45 Delphi Round 2
Michael Czinkota (Georgetown University)
Thomas Cooke (Georgetown University)

Kim Boeckmann (Georgetown University)
Dinner (at leisure throughout the resort)