"Partnership" may be an overused word in today's business environment, but it is an extremely important one, especially in the growing arena of international sourcing.

Numerous factors, including extensive laws and regulations, cultural issues, global business etiquette and worldwide communications, make the process of finding appropriate and trustworthy business partners more difficult, and yet more important, than ever.

"It is important to be aware of cultural and communication differences because serious misunderstandings can occur if they are not taken into account, leading to loss of business." Madeleine Lynn, cross-cultural consultant, writer and editor

"The new global marketplace offers more sourcing opportunities than ever before," asserts Madeleine Lynn, cross-cultural consultant, writer and editor. "But with these opportunities come new pitfalls, as businesspeople deal with customers and clients with different cultures, languages, and expectations from their own. It is important to be aware of cultural and communication differences because serious misunderstandings can occur if they are not taken into account, leading to loss of business."

Marian Ladner, an attorney with the firm of Epstein Becker & Green, P.C., specializing in international trade, declares, "The most important business issue is communication. This communication must include regulatory requirements as well as the laws that must be observed. For example, if a U.S. company hires an overseas representative, that person is bound by U.S. laws. It is important that this be clearly communicated to all parties involved."

Attorney Michael Levine, also with the firm of Epstein Becker & Green, P.C., agrees, noting, "Two important issues are meeting the customer's expectations concerning their vendors' and their suppliers' compliance with their vendors' and suppliers' legal responsibilities as employers; and vendor and supplier compliance with their customers' Corporate Social Responsibility standards. Important cultural issues include the ability to manage and to communicate effectively across borders. Global businesses must recognize that there are unique cultural aspects to managing workforces in different countries of operation. Managers may be 'imported' or transferred into one country from the country in which the headquarters, parent company, or the home office is located. It is not uncommon, then, for managers and workers to be from different geographical and corporate cultures, and those differences must be identified and addressed."

"The most important business issue is communication." Attorney Marian Ladner

Penny Sikalis, vice president and group show manager for George Little Management, points out that trade shows are an important venue for both importers and exporters to meet potential business partners. George Little Management is launching Global Home Textiles™, a show specifically serving the needs of international sourcing firms and suppliers, May 8 to 10 at the Orange County Convention Center in Orlando, Fla.

"There are tremendous opportunities in the rapidly-evolving global marketplace," Sikalis comments. "International sourcing has become the fastest-growing field in the home furnishings industry. George Little Management is committed to helping global sourcing firms and overseas suppliers develop strong, long-lasting and profitable relationships with one another."

The opportunities for global commerce are exciting and multi-faceted. However, there are numerous pitfalls that companies must address.

Levine explains, "The challenges include accurately assessing the compliance challenges posed by their business operations; understanding the current and shifting legal landscapes they face; carefully evaluating their capabilities in light of proposed business volume; and empowering—and requiring—middle managers and supervisors to anticipate and to surface these issues to top management before problems arise. A professional guide may be able to alert businesses to, and seek to help them steer around, potential pitfalls."

"A professional guide may be able to alert businesses to, and seek to help them steer around, potential pitfalls." Attorney Michael Levine

Ladner adds, "Intellectual property issues are an area of concern. No matter what you do, in some countries they do not respect intellectual property. Companies hope that there won't be a breach of trust, but they have to expect that there will be."

Language and cultural issues can pose problems as well. "It is easy to jump to conclusions that you understand your partner when in fact assumptions on both sides may be incorrect," Lynn remarks. "Do not rely on partners' interpreters. Hire your own, or have a neutral interpreter for both sides. Have a neutral party check the translations of contracts. Even if counterparts speak excellent English and your negotiations are in English, ask plenty of questions to make sure that both sides truly mean the same thing!

"Take the time to know your market," she advises. "If advertising overseas, make sure that your Web site and other ads are written correctly—it is amazing how often companies choose names that sound inappropriate in another language or have written materials that are full of mistakes. Equally, be sure to choose appropriate designs and colors and note that numbers may have lucky or unlucky symbolism in some countries. Be sure to know a country's national holiday periods, such as Carnivale in Brazil and other countries and Chinese lunar New Year, which falls on a different date every year and when the country effectively shuts down for two weeks."

Sikalis points out that U.S. companies need to find suppliers that they can trust. "All of the participants in Global Home Textiles, and our other trade shows, are pre-screened and ready to do business in the United States," she says. "This saves companies an enormous amount of time and effort, and can help give all parties confidence in their business partner choices."

"All of the participants in Global Home Textiles, and our other trade shows, are pre-screened and ready to do business in the United States." Penny Sikalis, vice president, George Little Management

Ladner says there are some key steps that companies must take to insure that international business runs smoothly. "It is very important to communicate expectations clearly, as well as make sure that all documentation is in order," she states. "For example, if a product is inbound to the U.S., it has to be documented as to country of origin and fiber content. The U.S. has very specific rules of origin, and these rules apply to each component of a product, including the fibers. There are also new rules, such as the '10 + 2' rule [from U.S. Customs and Border Protection] that requires additional data be provided before goods are loaded and on the water. So U.S. companies who are bringing in products from overseas must communicate with their suppliers to make sure that all of the appropriate information is documented and submitted prior to shipment. Because if the information is not provided?that container will sit on the water and not be allowed into a U.S. port."

Ladner also recommends that potential suppliers be screened against various governmental lists, which specify numerous companies that are prohibited from doing business in the U.S. These lists are maintained by the Department of Commerce, the U.S. State Department and the U.S. Customs and Border Protection department. "It is an extra level of due diligence, but a necessary one," she says.

Lynn agrees, warning, "Do your homework. Find out as much about your partners as you can before committing. Sometimes consulates or embassies can help you gather background information on potential overseas partners. The best way to meet potential business partners is through intermediaries, either governmental or private, such as lawyers or consultants. This way you have some background on your potential partners. It is often wise to start with a trial period first to see how things work out."

Levine states, "Knowing how important social compliance—also known as corporate social responsibility and sustainability—is to their customers, and recognizing that it is a source of competitive advantage to them, manufacturers should build the internal capability to achieve and sustain required compliance. They should seek out experts in related fields to provide cost-effective up-front and proactive guidance. This is preferable to, and likely to be less costly than, addressing these issues in a crisis."

Levine notes that companies can seek to manage risks posed by new business relationships by performing "pre-relationship," on-site due diligence reviews. "They should make sure they have a clear understanding of their business partners' expectations, and they must live up to the letter and spirit of the partnerships into which they enter," he says.

Executives agree that the most important issue is maintaining open communication and building trust.

"Meeting expectations, and communicating often, early, and honestly, are important parts of long-lasting relationships," Levine comments.

Ladner opines, "The best way to develop relationships is to build a working process together with your key business partners. There are many hurdles to overcome, and companies need to address all of them. It is a new environment, but companies can work together to address the issues. There has to be transparency throughout the sourcing process, as well as written policies between business partners."

Lynn asserts, "Business relationships the world over are based on trust, and trust takes time. There are no shortcuts to developing relationships with partners."