Chapter 6 The Commercial Diplomat in Interaction with International Business: Results of an Empirical Study

Abstract

Government, business support organisations (BSOs), support services and client business firms constitute the key actors involved in the business–government interaction within commercial diplomacy. While businesses are interested in support in their international operations, commercial diplomats (CDs) work towards both objectives: supporting individual firms and promoting the home country's national economy in general. BSOs, public or private or mixed such as bilateral chambers of commerce, sector associations, investment promotion agencies and other self-help business organisations, complete the CD's offer, and are often referred to, and participate directly and indirectly in the home country's trade promotion effort. The nature of the CD's service to beneficiaries is highly people based, and contains both a consistent amount of government instruction and CD's own personal judgment and initiative in promoting various sectors/sub-sectors and spotting business opportunities. The ‘intermediary’ function of the CD between the beneficiary business and its potential future business partner is important. The interaction may start on either side: the business firm may approach the CD or vice versa. To a large extent, export issues remain the most important enquiries from business to CD vs. other issues such as foreign direct investment, joint venture and debt issues. From a business perspective the main advantages to use the CD's service are threefold. The CD appears to business firms as the central platform, the starting point to promote bilateral business. Second, CDs enjoy trust as an institution: they are considered credible and neutral (credibility and neutrality). Last but not the least, CDs are found useful in helping out firms in their first steps in foreign markets (not necessarily first exporters but for the firms to which the host country market only is new). The transaction between CD and beneficiary business firm has a material price: some services such as market research are for fee and are often subcontracted. Others being part of a ‘basic service’ of diplomats are free of charge.