5W Principle in Export Incentive

5W Principle in Export Incentive

Fahri Özsungur (Adana Alparslan Türkeş Science and Technology University, Turkey)
Copyright: © 2020 |Pages: 22
DOI: 10.4018/978-1-7998-3744-2.ch008

Abstract

Export incentive is a developing field with the innovations of the digital world. Organizational development, performance, and internationalization of enterprises are possible with this important resource. This important export resource, which varies from culture to culture, is examined in this chapter. Export incentive is handled considering the 5W principle, which is introduced as a new principle and process. The aim of the chapter is to create a new and strategic roadmap for the export incentives for the businesses and to determine the processes.
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Introduction

With the impact of globalization, the economy has become an important driving force for businesses. Individual ventures reveal important businesses via collective actions. The growth strategies of the organizations and the need for access to various customers and markets bring to mind the export method. New ventures, providing innovations to different countries and communities, may be possible by export. The internationalization of the enterprises is not limited to the country of birth but is also possible with the export method. Besides, it is possible that introducing the organization and country culture to different countries and consumers, to eliminate limits on consumer consumption needs, can be accomplished by this method. In addition to these positive aspects, export also requires the management of resources.

Sourcing is an important need for businesses. It is necessary to provide resources for the management of the export process. One of the methods of providing resources is to benefit from incentives. Businesses can create their resources as well as benefiting from the resources around them (Ahmed, Julian, Baalbaki, & Hadidian, 2006). According to the theory of resource dependence, the idea that enterprises are fully dependent on the resources around them has differentiated in the digitalizing world.

According to the criteria set by the resource-based approach, the existing resources of the enterprise should be able to provide a sustainable competitive advantage. However, thanks to the digital world and developing technology, it is important for enterprises to transform their existing resources into sustainable competitive advantage, to convert them into opportunities by obtaining the resources around them, to protect and develop their existing resources, and to reveal new resources with creative ideas (Billings, McGill, & Mougoué, 2003). A new field in which this approach is adopted is the export incentive. Businesses can create new ventures with the resources they obtain via export incentives. These ventures provide the development of the entrepreneurial spirit of the organization and increase the interaction with the internal and external environment of the organization.

Export incentive requires access to new resources, the sustainability of the resources obtained dependence on the resources to be obtained from the environment and efficient use of these resources through the new market/customers to be obtained through export (Ramaseshan & Soutar, 1996). The approach of “resource dependence” does not represent a complete dependency on export incentives. This dependency is only a tool for the strategies for the utilization and acquisition of resources by businesses. Implementation of this strategy requires a process management. It is possible for enterprises to access the resources they need to carry out exports by making use of incentives.

In this light, the export incentive, which is one of the most important needs of the global businesses of the digital world, is explained in this section. The export incentive is examined under the titles of the “5W Principle” and “the export incentive process”, which is the first and new approach. The 5W Principle is examined in the context of organizational strategy. The incentive process is examined under the subtitles of the emergence of needs, research, application, resource utilization/distribution, profitability/productivity analysis.

Export

Export is a component of international trade, where a product or service is produced in one country and shipped to another country. Export operations affect the economic dynamics of a country. When the country exports more than it imports, it gives trade surplus and vice versa. The economic balance is influenced by the export policy, method, and level. Export is an important economic tool in national and international competition (Sharma & Oczkowski, 2001). Companies competing at the national level may want to market their products at the international level depending on their growth strategies (Zia, 2008). In particular, companies looking for a market to reach new customers abroad may prefer the export method. Export is an operation performed by the enterprise in connection with the market or the customer's market. These operations require a specific process and principle and the principle we recommend is the 5W principle.

Key Terms in this Chapter

5W: Principle: Principles that refers to the whole set of rules for the realization of exports.

CAGE Distance Framework: A strategy method that consists of the initials of the words cultural (C), administrative (A), geographic (G), and economic (E), developed by Ghemawat (2001) to achieve adapting to differences between cultures.

Export Incentive: A system that varies from country to country and includes incentive monetary and legal policies related to the export of products/services.

Export: A component of international trade, where a product or service is produced in one country and shipped to another country.

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