According to the writer John R. Darling, Trans‐Technologies’ crisis “has taught the world of international business that a crisis can occur with little or no warning, anywhere, anytime. And it can happen to any business firm, large or small, national or international. It is, in other words, the safest of assumptions that a crisis looms on the horizon of every firm.”

However, Darling (1994) considers that this fact is not necessarily bad news because if a business accepts this reality as a given, it will acknowledge that anything is possible. Therefore, it will be on the right track mainly because everyone on its team will plan properly in order to turn the crisis into an opportunity.

What is this Crisis?

Trans‐Technologies, Ltd is a major firm that represents numerous small to medium‐sized American manufacturers of high technology type products. It is a sales agent for primarily health and environment‐related manufacturers of electronic sensing devices which has a big market abroad. Its exports constitute around 60% of its annual gross revenue and 75% of its net profits. Recently, its sales to various buyers in the former Eastern bloc countries, and in particular Russia, have grown significantly.

Nonetheless, the Russian Office of Foreign Commerce had passed a resolution that increased the import duties on electronic products and replacement parts by 15%.

The Trade Consular′s letter indicated that in planning for the coming year′s operations, the firm should make its plans based on an additional increase of 10% in the import duties. This resolution highly affected the company. That is because a 15‐25% increase in the volume of these products involved in barter trade arrangements would place additional requirements for sale and distribution of these products by Trans‐Technologies.

Also, the Russian attitudes towards market‐driven trade, the public acceptance of technological trade with Russia, the international economic conditions existing in various countries and political issues happening in the USA would all have a huge impact on the company.

On the bright side, the CEO was always monitoring and assessing the external environment and its interactions.

Before receiving the Russian Trade Consulate letter, the CEO had begun preparing his company to a possible crisis because he paid attention to the warning signs. A few months before the crisis, he had visited Moscow, interacted with Russian trade officials and listened to discussions revolving around possible import duties and revenue advantages for the country. As a result, Trans‐Technologies were perfectly able to overcome this crisis and turn it into an opportunity!

In sum, the CEO at Trans‐Technologies can simply teach that “any time a firm is not in a crisis; it is instead in a pre‐crisis or prodromal mode.”

Source

Darling, J. R. (1994). Crisis management in international business: Keys to effective decision making. Leadership & Organization Development Journal, 15(8), 3-8. Retrieved from https://doi.org/10.1108/01437739410073047

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