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Of Crimea and Punishment
02:05, 28.08.2014
Armenian News-NEWS.am presents the article by professor at Georgetown
University Michael R. Czinkota.
The conflicts between Russia and Ukraine, has led to Western against
Russia. Some Russian officials no longer can travel abroad, and
international investment and trade are restricted. Russian President
Vladimir Putin, in turn, plans retaliatory sanctions against the U.S.
and Western Europe by restricting Russian food imports and energy
exports.
Governments attempt to impose comparable sanction burdens on each
other. However, due to cultural and historic differences,a policy
based mainly on sanctions will lead to inequities and substantially
therefore increase the risk in international trade.
Key differences exist between Russia and western nations regarding
profit, competition, risk and reward, private property and growth, and
how they affect the outcome of sanctions.
In the U.S., profit is the expected result of doing business, and low
profits are usually blamed on management. By contrast, lower profits
in Russia allows its government to shift the blame onto foreign
culprits.
Private property is a key reward in the United States, while in Russia
'private' often means responsibility and risk exposure. Since growth
is key in the U.S., any inhibitors of growth are seen with concern. A
wide variety of economic performance in Russia, makes its growth much
less of a pressure point.
Sanctions against the U.S. may burden the population and lead to new
candidates and policies. In Russia, the sacrifices imposed by
sanctions seem to indicate dedication and strength. Declining U.S.
profits or growth cause doomsday scenarios, while time is expected to
bring economic improvement.
Losing out on the very latest technology means falling behind for
Americans. For Russians, pretty good technology is a pretty good
achievement. Russian ownership of space ferries and satellites and
their use by the U.S. makes them proud.
Russia's size of 6.6 million square miles makes it the largest country
in the world. The 300 million U.S. population more than doubles that
of Russia. Still, the Russian market is of great importance for many
global firms.
There are only few historical rewards for former leaders. For example,
though Greece invented the Olympic Games, no points are given for that
ancient super action. Going first with the Greek flag when marching
into the Olympic Stadium is just about all there is. Russia may well
see its existing strength and market size as an opportunity for
leadership.
We all are said to understand each other so much better than in the
past. Yet, much of our thinking is based on our history, culture and
outlook. They define our spheres of interest which we aim to preserve.
Ukraine, for example, will tend to be closer to Russia than to the
United States. The average Russian understands as much about Columbus,
Ohio as the average American does about Sevastopol.
Global relationships between Russia, Asia, Europe and the United
States are being re-balanced. Key changes are likely to come from
outside the United States. It would be unwise to undertake
transformations without dampening the key concerns of key players on
all sides.
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.
Armenia News - NEWS.am
From: A. Papazian
02:05, 28.08.2014
Armenian News-NEWS.am presents the article by professor at Georgetown
University Michael R. Czinkota.
The conflicts between Russia and Ukraine, has led to Western against
Russia. Some Russian officials no longer can travel abroad, and
international investment and trade are restricted. Russian President
Vladimir Putin, in turn, plans retaliatory sanctions against the U.S.
and Western Europe by restricting Russian food imports and energy
exports.
Governments attempt to impose comparable sanction burdens on each
other. However, due to cultural and historic differences,a policy
based mainly on sanctions will lead to inequities and substantially
therefore increase the risk in international trade.
Key differences exist between Russia and western nations regarding
profit, competition, risk and reward, private property and growth, and
how they affect the outcome of sanctions.
In the U.S., profit is the expected result of doing business, and low
profits are usually blamed on management. By contrast, lower profits
in Russia allows its government to shift the blame onto foreign
culprits.
Private property is a key reward in the United States, while in Russia
'private' often means responsibility and risk exposure. Since growth
is key in the U.S., any inhibitors of growth are seen with concern. A
wide variety of economic performance in Russia, makes its growth much
less of a pressure point.
Sanctions against the U.S. may burden the population and lead to new
candidates and policies. In Russia, the sacrifices imposed by
sanctions seem to indicate dedication and strength. Declining U.S.
profits or growth cause doomsday scenarios, while time is expected to
bring economic improvement.
Losing out on the very latest technology means falling behind for
Americans. For Russians, pretty good technology is a pretty good
achievement. Russian ownership of space ferries and satellites and
their use by the U.S. makes them proud.
Russia's size of 6.6 million square miles makes it the largest country
in the world. The 300 million U.S. population more than doubles that
of Russia. Still, the Russian market is of great importance for many
global firms.
There are only few historical rewards for former leaders. For example,
though Greece invented the Olympic Games, no points are given for that
ancient super action. Going first with the Greek flag when marching
into the Olympic Stadium is just about all there is. Russia may well
see its existing strength and market size as an opportunity for
leadership.
We all are said to understand each other so much better than in the
past. Yet, much of our thinking is based on our history, culture and
outlook. They define our spheres of interest which we aim to preserve.
Ukraine, for example, will tend to be closer to Russia than to the
United States. The average Russian understands as much about Columbus,
Ohio as the average American does about Sevastopol.
Global relationships between Russia, Asia, Europe and the United
States are being re-balanced. Key changes are likely to come from
outside the United States. It would be unwise to undertake
transformations without dampening the key concerns of key players on
all sides.
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.
Armenia News - NEWS.am
From: A. Papazian