Starting and managing a business that deals with exportation and importation of goods is one of the challenging tusks that a good entrepreneur should know how to manage. International trade is among the hottest industries that most enterprises are venturing. Despite the fact that the import and export business is quite profitable, it is important and rudimentary to understand the policies that have been set to govern the process of importation and exportation of goods and services.
As in the case of this report paper, we are going to focus our study in the policies that have been set by the New Zealand government and how it can be used to increase the export of Ngai Tahu Farming’s products to chain supermarkets in home country. This is due to the attractive image of the clean and green niche provided by the New Zealand policies and set of agreement.
The role played by the treaty of Waitangi
Any business relationship is no different from personal relationship. The most important thing to note is that business treaty is meant to reduce the frequency of disagreement between business partners especially if the relationship is meant to be long term. The Waitangi treaty with the Ngai Tahu firm ensures that there is sound business relationship. It further facilitates the making of adjustments to agreements in the consultations with the able clients and stakeholders through sharing of information with appropriate partners (Ahamat, 2010).
According to Bollard (1986), in addition to this, the Waitangi treaty furthermore is responsible for ensuring that business in New Zealand is conducive through giving equal rights to the Ngai Tahu farmers as the Pakeha in of doing business. It further advocates for the recognition of the culture and business of the indigenous people thus ensuring smooth and clean business environment for.
the New Zealanders.it brings for the issue of equality, which ensures that incase of the establishment of any business within the Maori community, equal employment opportunities are offered without racism. Furthermore, the TOW has given the Maori the right to own their land thus resulting to large settlement in terms of land and cash. It has enabled the Ngai Tahu farmers to engage in clean business in the country.
For any business partnership to be sustainable and successful, it is rudimentary to understand that both parties must uphold partnership principles. These principles entail humanitarian rights that ethically guide the business endeavors such as equality, transparency, acts of responsibility, -research-oriented approach and complementarity. These principles are important since they are responsible for ensuring that through working in partnership with the Ngai Tahu firm, there is decreased disagreement. The principles of partnership can be coined in a way that will ensure that the partnership with Ngai Tahu is a long-term on-going relationship (Burra & Ahmad, 1991).
In addition to these, I view the principles of partnership as a guiding policy that ensures quality and working in a co-habitable manner that would ensure our different interest with Ngai Tahu farming become more than the sum of our partnership. The most important way of viewing the principle of partnership with the Ngai Tahu farming entails trying to stipulate a mechanism that will lead to the creation of an ideal situation. where; working with Ngai Tahu farming can act as a source of generating new ideas through formulation of better policies, addition of credibility to the policies by assisting in its implementation and knitting new market niche together.
Through working together with the Ngai Tahu farming, this will facilitate the creation of a multicultural and bicultural environment, which tends to act as a competitive advantage environment in the business arena. Multiculturalism refers to having more than two cultures or several cultures within a single group or organization. The presence of bicultural and multicultural practices within this partnership is advantageous since it represents the promotion of ethnic equality and tolerance towards cultural practices. They are responsible for introducing different values, beliefs and customs within the business environment that will facilitate the growth of the business it will thus enable us to show respect and appreciate our diversity .
Through collaborating with the Ngai Tahu farm, it will lead to the creation of a multicultural team that has diverse experience and perspectives depending on the culture that the stocks of competence come from. This involves having a heterogeneous team that can be divided into three parts namely multicultural team, bicultural and token team. Bicultural team is represented by members from two distinct cultures. With this kind team often address and integrate the perspective of both cultures thus coming up with solutions that are more viable to the present problems
On the other hand, due to the presence of diverse cultures that has integrated in New Zealand, working with Ngai Tahu firm will enable the partnership to function more creatively leading to higher productively contrary to homogeneous teams. It creates the ability to generate viable ideas and potential solutions for present problems (Zaveckaite Ulbinaite, &, A, 2018).
Strategies and plan of actions that facilitate good relationship with Ngai Tahu
Taking a keen look at the set of values that Ngai Tahu firm has set forth to ensure that it behaves in an ethical manner with other organizations, this therefore facilitates the development of clear strategies and set of actions that would ensure that my firm maintains a good relationship with the firm. The firm has a set of values such as responsibility for their people, incurring appropriate actions and ethical leadership. To ensure that good relationship with the firm, the following are the strategies that I will deploy. The success of any business is highly influenced by the success of the relationship. Creating an environment for mutual respect by developing a positive and healthy cultural environment for both teams, which involves treating one another with trust and gratitude (Chengyan Yue & Beghin, 2009).
Another strategy involves development of an effective communication system between Ngai Tahu farm and organization through building of trust. The most important aspect of any business is trust. It is the foundation of any business relationship. This will thus facilitate creation of transparency with the Ngai Tahu firm so that there can be mutual trust.
Lastly, another strategy to be undertaken to ensure the development of a lasting relationship is being open to diversity. Given the fact that we come from different cultural backgrounds and settings, ensuring successful relationship will be necessitated by accepting the different culture s as it can be used for the advantage of the firms. This diversity may involve the difference in languages, religions, culture and geographical locations. In addition to these, the art of being mindful may also help create an effective business relationship with Ngai Tahu farm.
As denoted by Yang, Hsu, Sarker & Lee (2017), several business structures exist and not all of them are appropriate depending on the kind of business you engage in. selection of a business structure is not a light decision, as it requires sound counsel made by experts in business. The entity selected to be run by an entrepreneur largely depends on liability, the level of taxation and the method used to keep records. This business structures include; sole proprietorship. It the most utilized business structure in most of the firms that exist. It is the simplest form all structures of businesses and does not require any paper work or fees paid to start. There is no difference between the sole proprietor and the owner of the business that is tax is paid on any business profit. The business is not limited.
Saunders& Cagatay (2003) denotes that another form of business structure that exists is partnership. It refers to a business owned by two or more people. The partnership commences at the beginning of the business and just like sole proprietorship, the liabilities are not limited just to the business no unless it is a limited partnership. This kind of partnership is complicated and does require capital to start. The limited partners are not liable to any liability in addition to the fact that they cannot be engage in the Daily activities of the firm.
Other forms of business structures are LLCs and corporations. They are complex and costly to form compared to other business structures. It depends with the type of work an individual plans to operate. A corporation is entities that stand on their own and pay its own tax and is separated from the owner. It is not affected by the death of the owner. It is responsible for paying its stocks of competence inform of salaries drawn from its own profits. The major difference between an LLC and a cooperation is that LLC is not a separate entity from the owner.
Micro and macro environmental factors that may influence the business
Every organization is always affected by external factors, which are beyond the control of firms. These factors are known as micro and macro environmental factors but they largely influence the decisions made when trying to strategize the market. Micro environmental factors include the suppliers. To some extent, they can control the success of the firm if they hold the power. This entails the power to supply goods (Trampusch, 2014). In case they are the only suppliers, for instance Ngai Tahu farming, their supply then tends to become the vital part of the buyer-finished product hence they can influence the direction of the business you own.
The customers can also influence the direction of the organization. Whether local or international customers, the reasons held by this consumes for buying your product plays a large role and tend s to influence the direction and approach you will use to market your product to them. Another micro factor is competition. How many business organizations sell similar products like you? you need to consider the way they sell their products and take it into account you ought to consider how their price differentiation affect your business and try to adjust accordingly (Newswire, 2015).
According to research, some of the macro factors that may affect the business include demographic factors. It is important to note that demographic factors affect differently the market segments. Such as country or region, the ethnicity and age difference in the population that you intend to supply the product. Economic factors are also among the macro factors that influence the business. We have no control over them. They possess the ability to influence the direction of the organization production and the decisions made by the consumers in relation to the goods you supply (Ogutu, Bennett & Olawoyin, 2018).
In addition to these factors, we do also have natural / physical and technological factors. The level of skills and work force used in the production process in addition to the technology applied largely influence the whether the business will run smoothly or not. Political/ legal factors in addition to social and cultural forces also affect the running of the business largely. The organization should ensure that it makes sound decisions because of political and legal development that relates to the business. In short, micro and macro environments contain large significance to the organization thus, they should be considered in depth when making crucial decisions.
Talking of free trade agreements, these policies have been designed to reduce the barriers to trade between countries. They have been set to help protect the local market and industries that come in the form of tariffs and trade quotas. They also help to cover the procurement, intellectual property rights thus creating competitive environmental policies. The endowment theory can be of great help in the business since it advocates for that the ordinary means of increasing wealth is through selling more to strangers and yearly than the amount, we consume of theirs in value. The amount of exports needed to obtain the required amount of imports is known as terms of trade, which is necessary to this business relationship since it sets the foundation for healthy business practices (Parrish, 2018).
Non-tariff barrier
A non-tariff barrier refers to mechanisms used for restricting trade with trade barriers other than the use of tariffs. They may include the use of barriers such as quotas, embargoes, levies and sanctions. Embargoes it refers to a non-tariff barrier which is meant to restrict the trade of certain commodities. It is a measure used by the government in case it is faced by certain specified political and economic conditions. Sanctions this refers to administrative actions and procedures of trade that have been set forth to slow down or limit
the ability of a given country to trade. Additionally, quotas are agreements that are set by trading countries to set the limit of good and services to be imported to a specific country (Ogutu, Bennett & Olawoyin, 2018). There is always no restriction on importation of such goods until a country reaches its quota. Another form of non-tariff barrier is the use of license. It may be the desire of countries to deploy the use of license to restrict the amount of products to be imported to a particular country. When granted this license, a business can freely import goods and services, which had otherwise been restricted in the country. When these policies are used by the New Zealand, they will drastically affect the amount of import. As an exporter, the understanding this policies is vital since they tend to discourage the level of import and encourage high exportation.
As denoted in the Zealand: Country New Report. (2018), Tariffs refer to the tax that is payable on a particular class of imports or exports. They can be termed as seismic events that have dire consequences on the economy of a particular nation. They tend to have both direct and indirect impact on the economy of the country. They increase the price of commodities thus limiting the volume affordability. In addition to this, tariffs tend to attract counter tariffs from other trade countries thus making it very expensive to export or import goods and services (Langhammer, 1991). This is the reason why the New Zealand government has continuously.
been attenuating tariffs over the last decades with the aim of creating a conducive business environment for its citizens. Furthermore, tariffs have the tendency of creating inefficient corporations between trade countries. Despite the fact that it may protect the domestic industry for a short time, after a given period, they tend to make the domestic firms unproductive and inefficient thus the New Zealand government is doing away with it to ensure sustainability in the production of goods and services (Wood, 1998).
Mechanisms used by New Zealand government to encourage international trade
With the aim of increasing international trade with other countries and creating a greener pasture for its citizens, the New Zealand government has come up with a number of strategies such as the use of non-tariff barriers. Most of their tariffs are so small and their influence is overwhelmed with fluctuations in currency, commodity price shifting and changing the shipping cost. According to research shows that the Gross domestic income of New Zealand will have increase since it will have increased its export and selling them at affordable prices which can then be used to extra import of the country. Another game changer for the New Zealand is the transpacific partnership agreement, which tends to deliver significant benefit that has been brought about by the previous hard won trade agreement. It has made New Zealand to be an open and transparent and trade –friendly country.
The role of world trade organization in modern trade
The World Trade Organization (WTO) has a critical role to do in the modern international trade in terms of global economics, political and legal issues that come up in the international arena due to globalization. The function of this organization is to reduce the effects of related trade barriers between nations and opening new business arena. It strives to create a fair platform for the countries that have subscribed to it through easing the export, import through peaceful conduction of business. WTO plays the role of providing a forum through which trade negotiations can be carried out by member countries.
According to Elms (2013), the organization is responsible for facilitating the implementation, administration and ensuring that there is smooth running and operation of the trade agreements and treaty amongst its ascribed countries. Additionally, it plays a crucial role in the world economy by settling any disputes that may arise in the cause of operation. It rules over and regulates the consensus based agreement mechanism to ensure that no war arises between member countries.
Given the fact that Ngai Tahu firm wants to be involved in international trade with other nation, I would suggest that it uses the partnership and strategic alliances as its entry mode. Partnership is the best method for the firm since it is more advantageous than the other entry mode. The partnering organization has first hand and well researched information about the local market and can give viable advice to Ngai Tahu farm. With partnership as a mode of entry, the Ngai Tahu farm is assured of reaching more localized prospective customers and be able to build a wide network in the foreign market thus acting as a strategic advantage.
Risk management plan
Risk identification
Ngai Tahu farm can try to identify the risk by considering the Causes of the problems they face. The firm should not ignore the source of the risk at hand through addressing the problems that are at the level, which can be handled. These threats may include loss of money, accidents, casualties, staff loss and property loss in the export process. Classifying the risks into categories which will facilitate finding solutions that are more viable to help solve them.
Risk analysis
Risk analysis here involves the grouping of risks into two categories namely risk qualitative risks and quantitative risks. Qualitative risks refers to those risks which can only be explained in word form but cannot be quantified their degree cannot be measured. Thus, they can be graded as either low medium or high by their likelihood of occurrences.
This involves the strategy set forth to help curb the problems at hand in addition to the speculated ones. It entails the selection of appropriate control measures as shown in the figure below.
The following figure shows how Ngai Tahu can implement and record its risks so that they can formulate the best strategy to curb the problem.
References
Ahamat, H. (2010). Free Trade Agreement between Malaysia and New Zealand. Journal of East Asia & International Law, 3(1), 226–229.
Bollard, A. (1986). The Economic Relations Agreement Between Australia and New Zealand: A Tentative Appraisal. Journal of Common Market Studies, 25(2), 89.
Burra, L., & Ahmad, M. I. (1991). Impediments facing New Zealand exporters developing markets in Southeast Asia. Marketing Bulletin, 2, 60.
Chengyan Yue, & Beghin, J. C. (2009). Tariff Equivalent and Forgone Trade Effects of Prohibitive Technical Barriers to Trade. American Journal of Agricultural Economics, 91(4), 930–941.
Elms, D. (2013). The Trans-Pacific Partnership: The Challenges of Unraveling the Noodle Bowl. International Negotiation, 18(1), 25–47.
Langhammer, R. J. (1991). Towards Regional Entities in Asia-Pacific the Role of Japanese Foreign Investment in Service Industries. ASEAN Economic Bulletin, 7(3), 277
Zealand: Country New Report. (2018). Political Risk Yearbook: New Zealand Country Report (pp. 1–34).
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