Once upon a
time, many years ago, the traditional wisdom was that war was
good for business. In today’s increasingly global economy,
however, this saying is for the most part outdated and downright
fool hearty. Particularly if you have -- or are considering --
expanding your business overseas, or have extensive holdings in
foreign companies either through investments or direct
partnerships, the current conflicts going on all over the world
– and in the Middle East in particular – have the potential to
negatively impact your profits, if they haven’t already done so.
Regardless of who is right or wrong in the various wars going on
around the globe – or where you personally stand on the issues
behind them – it is impossible to ignore their potential impact
on your ability to profit from your international business
ventures. Even if you have no holdings or business anywhere near
a war zone, the potential for negative impact is still very
real.
There really
is no way to completely insulate your overseas business or
investments from the negative impacts caused by war – any more
than you can completely protect your own home from the damage
that can be caused by a flood or a hurricane. The simple fact is
that as you have no control over geopolitical events and
conflicts, you are in many ways at their mercy. However, by
identifying those things that can be potentially damaging to
your business and taking steps to guard against them, it is
possible to significantly limit your damage, and decrease your
business’ exposure.
A quick trip
to the local gas station will show you perhaps the most readily
visible impact these wars are having. In the United States, as
we all know, gas prices have risen dramatically in the last 12
months – but the increases you see at your local gas station are
nothing compared to the increases that have been seen in some
parts of Europe, Asia and Australia. In Europe in particular –
where petrol has traditionally been more expensive than it is in
the United States – the effects are particularly ominous.
Substantially higher gas and – with winter just around the
corner – heating costs means less disposable income in the hands
of the citizens which, in turn, will very likely mean a slowing
in some segments of the economy. True, the same can certainly be
said for the US economy as well, but it is important to remember
that the United States has a higher per capita income than most
European nations, and so the economic impact of higher oil
prices will, in all likelihood, hit them harder. While quality
generally has always – and in the long run probably will
always – be more important to the average European customer than
price, in the short term price is very likely to become a major
issue in many of the European markets. Remaining aware of and
updated on general consumer buying trends in the specific
nations you are doing business in is a critical indicator for
what direction you may be required to take your business in that
country.
Another
impact the wars around the globe can have on your business
revolves around the political climate that exists in the country
where you are doing business or have invested. As a quick look
at CNN will likely point out, all the world does not share the
United States’ views on international matters – particularly
wars. Particularly in Asia, South America, and some parts of
Eastern Europe it is important to keep a close eye on the stands
that the various governments are taking on the various wars, and
remain very aware of any dramatic growth in anti-American
Governmental sentiment. While certainly large segments of the
governments of the European Union nations agree with US
policies, it is also important to make certain that you
understand how the people in the nations you are doing
business in feel – as this is quite likely to be the same way
that your partners there feel. Any major shift in feelings about
the US as a whole by the population of a nation where you are
doing business can dramatically effect the way you will
need to conduct your business there.
As I write
this article, all carry on luggage and liquids have been banned
on all domestic and European flights from the United States, and
Airline security stands at an unprecedented level of high alert.
In the United States, it is suggested that you arrive at the
airport four hours early for any overseas flight. The days when
your travel time overseas could be combined with productive work
time via your laptop and satellite internet connection are over
for now and, while these restrictions are sure to be removed at
some point, they will almost equally surely come back again. The
simple fact is, international travel is becoming increasingly
time consuming, inconvenient, unproductive and, in some cases,
dangerous. Sad to say terrorism – and the threat of terrorist
attacks particularly on Americans abroad – is a very real
concern. Where it was once both practical and economical – and
even a perk – to have your senior people travel to overseas
operations, this is no longer always the case. Time, money, and
peace of mind can be saved by either installing or upgrading
computer networking platforms with your overseas offices and/or
partners so that the majority of your business with them can
take place via the internet. In the future, there is every
reason to believe that the occasional trip to Rome, or London,
or Paris will go back to being a “perk” for your top performers.
However, until the world situation stabilizes again, in most
cases your people’s productive time can be better used at home
rather than sitting for hours in an airport or on a plane.
There is
nothing good about war, but history has taught us that wars
always end – and the current conflicts raging around the globe
will end as well. They can best be viewed – from a business
standpoint at any rate – as a tragic inconvenience that needs to
be analyzed, and then dealt with. By watching how trends change
on a weekly – if not day by day – basis in the nations you are
doing business with, as well having a finger on the pulse of the
feelings of both the governments and the people of these
areas, you will have the information you need to make informed
decisions and limit your business’ exposure. You do not have the
ability to change the various geopolitical paradigms that
account for wars, but you do have the ability to protect
your business from the damage that those wars can cause!
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