The Book The Travels of a T-Shirt in the Global Economy by Pietra Rivoli
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The book The Travels of a T-Shirt in the Global Economy: An Economist Examines the Markets, Power, and Politics of World Trade by Pietra Rivoli tells a story about the processes a t-shirt goes through before and after it becomes a finished product (Rivoli, 2005). The author creatively uses a t-shirt to analyze the issues involved in international business. In this case, the story of a t-shirt explains different political, social and economic factors that take place in international business (Rivoli, 2005). For this reason, it is valuable to compare this book with the book International Business by Charles Hill to find out if they have a correlation. Therefore, this report aims at analyzing how this book relates to international business and what it teaches the readers about international business.
Readers can learn several things about international business from Rivoli’s book. First, they learn that it is not only global economics that plays a role in international business (Rivoli, 2005). In most cases, many organizations usually evaluate the economic factors to create strategic business decision relating to international business. These organizations fail to realize that it usually happens when they are performing local business transactions. It is because all the external factors in the local environment are similar as opposed to the international market.
In this case, a t-shirt story shows how all the processes apply economic factors together with other factors. For instance, America ships its cotton to China for it to be processed to fabric (Rivoli, 2005). It can be argued out that it is because of cheap labor in China, but it is not entirely true. When China is compared with other countries that provide cheap labor, China has the best corporate social responsibilities. The women who perform this process are well educated and they work in better working environment than other countries. Moreover, the majority of these women enjoy working in these companies irrespective of low income (Rivoli, 2005). Therefore, it shows that economy plays only a part in international business transactions.
Secondly, the book enlightens readers about the main reasons as to why different parties engage in international business. According to Hill, private companies perform international business transactions for their own profit gain, while governments perform international business transactions for profit and political gain (Hill, 2003). In this case, private firms will only perform international transactions that are profitable for their organizations. Governments will only perform transactions that are profitable for their countries and bring political advantage. Hill continues to state that international business is more about value addition for both the country and private organization when they use business strategy (Hill, 2003).
In this situation, Rivoli shows the reason why different parties perform international business throughout the journey taken by the t-shirt. For example, a t-shirt is shipped back to the US without any graphics or designs on it (Rivoli, 2005). Textile industries in the US have realized that it would be more expensive to import back the t-shirt as a finished product rather than an unfinished. According to the American trade agreements with China, finished products are more quota restricted as compared to unfinished goods (Rivoli, 2005). As a result, it becomes expensive for textile industries to purchase the finished products. For this reason, the story of a t-shirt shows that one of the main reasons for international business is profit.
A person interested in international business can learn a lot from the book by Rivoli. First, the book offers a person with a reality of how international business transactions are conducted. In almost all the books about international business, a person only gets to learn about facts. For instance, the book of Hill only educates a person about the definition, facts and strategies of international business (Hill, 2003). Moreover, readers are not provided with an experience of how these facts and strategies work in the real world of global business. Therefore, a person gets a feeling or experience of international business in the real world and how these facts and strategies are applicable in global transactions.
Secondly, the book by Rivoli makes an international business entertaining and easy to understand for a person interested in the area of study. As a reader, one is glued to the story of a t-shirt because he or she is curious to know what is going to happen next. In addition, by the use of a story, it makes easy for a person to understand and remember what he or she reads from the book. Moreover, the use of a story makes it easier for a person interested in international business to apply what he or she has understood. This book shows the readers that things are not usually the same way they picture them. For example, a person can clearly see that even developed nations need the services of the developing countries (Rivoli, 2005). In this case, many people think of taking their business to the developed countries yet they can easily achieve more profits when they take their business to the developing nations.
The book by Rivoli shows certain issues about the reality of international business as supposing to the book by Hill. According to Hill, in chapter sixteen of his book, he states that organizations may use any of the three factors (country factors, technological factors, and product factors) to choose where to take their manufacturing industry (Hill, 2003). These factors are vital in international business because organizations evaluate their most cost-effective strategic options. It is because profit maximization is one of the main reasons for organization to conduct international business (Hill, 2003). In the three factors, the main aim for organizations is to reduce costs and improve product quality.
These facts by Hill are evidenced in the book by Rivoli. First, when America chooses to take the next stage of manufacturing to China, its main aim is to reduce costs (Rivoli, 2005). In this case, it uses country factors to choose China as the most strategic option. The political environment and culture of China provide a conducive environment for manufacturing at a cheaper price in comparison to other nations (Rivoli, 2005). Again, when America takes back the next process of manufacturing, which is designing the t-shirt back to the US, it considers both the country and technological factors. China does not allow innovation like America (Rivoli, 2005). Therefore, America has better technology and creativity to process the t-shirt. For this reason, it is clear that Hill’s facts are proofed by Rivoli in her book.
Finally, the third part of the story shows that a t-shirt takes its final journey through recycling. People donate clothes they do not wear to the non-government organizations. In this case, the clothes undergo a sorting process, where they are separated into three categories (Rivoli, 2005). Those that are used for floor rags, those sent to China for recycling and those sent to Africa, where they are sold at a cheaper price as second-hand clothes. Rivoli decided to donate her t-shirt and follow it to its final destination (Rivoli, 2005). After following it through the selection process, final destination of Rivoli’s t-shirt is likely to be among the three categories.
However, in international business, this final process has certain implications depending on how one looks at the situation. In America’s point of view, the recycling of clothes through donation is seen as corporate social responsibility. It is where America is trying to protect the environment as it donates its clothes to the less fortunate people in developing countries. The process is done through a free economy, where there are no trade restrictions or barriers. Therefore, both the American government and governments of developing country benefit from this trade (Rivoli, 2005).
On the contrary, in some developing countries’ point of view, it may be seen as an insult to their nationality. These nations view such acts as a way of diminishing their pride by exporting second-hand clothes to their countries. It is because they feel as a dumping site for the developed nations. First, the second-hand clothes are likely going to destroy the economy of these nations. People working in the textile industry of these nations might lose their jobs due to poor revenues. Secondly, the government may not gain any revenue from the sale of these clothes since they apply the trade free rules.
According to international business, the free trade of second-hand clothes explains the different areas of study. The first area of study is political economy. Politicians in developing nations might create laws that ban second hand-clothes in their country. It clearly explains how political economy affects international business (Hill, 2003). Trade agreement is another area of study people can learn from the trade of second-hand clothes. Rivoli notices that the US has entered trade agreements with some developing nations to provide free trade of these clothes (Rivoli, 2005). In this case, the readers understand how trade agreements are done when it comes to international business.
In the book, Rivoli uses a t-shirt story to teach readers about key points in international business. First, the book offers the readers an experience of international business through the use of real story. Secondly, the readers are able to understand the reasons for international business for private organizations and governments. Finally, Rivoli educates her readers how economy, culture, and trade agreements are among other issues that perform an international business. It is worth noting that Rivoli provides the evidence to the facts written in the book International Business by Hill. Therefore, this report shows that the book by Rivoli is valuable to the study of international business.