Global sourcing

Challenges Faced in Sourcing Goods and Services from China

Businesses today routinely get goods and services from abroad. A few benefits of the technique include increased creativity, cost savings, high-quality products, and a gateway to new markets. However, a Rick Frasch essay claims that there are numerous common errors made by American businesses when sourcing goods and services from China, the country's second-largest trading partner. According to Frasch, Americans used to feel strongly about the trade between China and America, but recently they have changed their minds and now see it as a chance to make money. Despite this, these businesses consistently commit grave errors that obstruct their attempts to turn a profit. They include lack of adequately defined strategies, lack of well-defined standards when selecting the suppliers, lack of enough diligence performed on suppliers, and inadequate protection for payments and quality matters. In addition to this, the companies operate without written contracts or with contracts that have not been reviewed by legal professionals, disregard to the Foreign Corrupt Practices Act, and lack Mandarin translators in their teams.

Importance of Proper Supplier Selection Processes and the Foreign Corrupt Practices Act

The article touches on various issues tackled in the course material including the need for proper supplier selection processes, observance of the Foreign Corrupt Practices Act, and the importance of having Mandarin-speaking translator as part of the business negotiation processes. By observing these elements, U.S companies would be able to protect their interests while opening other opportunities and markets. Likewise, these are the elements that create long-lasting and fruitful business relationships since they not only protect the buyer's interest but also help build a positive image of the sellers. In my opinion, the article provides an excellent insight into the ups and downs of doing business with China. The author gives essential advice that could be applied when doing business with overseas partners.

References

Frasch, R. (2014). 8 common mistakes U.S. companies make when sourcing goods and services in China. Retrieved from https://www.forbes.com/sites/allbusiness/2014/01/30/8-common-mistakes-u-s-companies-make-when-sourcing-goods-and-suppliers-in-china/#3314a34212ce