If you have foreign clients, purchase raw materials abroad or lead tours internationally, cultural differences and communication problems can cause misunderstandings that harm your company's bottom line.
One fundamental consideration is the structure of your organization and the location of your teams. For instance, will your company be run from one central headquarters? If so, how will these teams be organized, what autonomy will they have, and how will they coordinate working across time zones?
If not, will you consider hiring local market experts who understand the culture of your target markets, but will work centrally?
Coca-Cola offers one example of effective multinational business structure. The company is organized into continental groups, each overseen by a President. The central Presidents manage Presidents of smaller, country-based or regional subdivisions.
Despite its diverse global presence, the Coca-Cola brand and product is controlled centrally and consistent around the world. While Coca-Cola is a vast international brand, the structure of your business and the number, nationality, and level of expertise of your team will vary depending on your industry, product, and the size of your business.
Foreign laws and regulations Along with getting your company structure in place, gaining a comprehensive understanding of the local laws and regulations governing your target markets is key.
From tax implications through to trading laws, navigating legal requirements is a central function for any successful international business. Eligibility to trade is a significant consideration, as are potential tariffs and the legal costs associated with entering new markets.
Airbnb ran into trouble inwith a crackdown on advertised rental properties falling outside local housing and tourism regulations.
For instance, European countries stipulate that a minimum of weeks maternity leave be offered to employees, while on the other hand, there is no such requirement for U. With the complexity involved in foreign trade and employment laws, investing in knowledgeable and experienced corporate counsel can prove invaluable.
Beyond abiding by official laws, engaging in international business often requires following other unwritten cultural guidelines. This can prove especially challenging in emerging markets with ill-defined regulations or potential corruption.
In response, companies doing business in the United States must abide by the Foreign Corrupt Practices Actwhich aims at eliminating bribery and unethical practices in international business. A good rule of thumb is to beware of engaging in any questionable activities, which might be legal but could have future reputational repercussions.
International accounting Of the main legal areas to consider when it comes to doing international business, tax compliance is perhaps the most crucial. Accounting can present a challenge to multinational businesses who may be liable for corporation tax abroad.
Different tax systems, rates, and compliance requirements can make the accounting function of a multinational organization significantly challenging. Accounting strategy is key to maximizing revenue, and the location where your business is registered can impact your tax liability.
Mitigating the risk of multiple layers of taxation makes good business sense for any organization trading abroad. A focus on tax efficiency is often the aim of international accounting efforts.
In the European Union, companies may benefit from the Common Consolidated Corporate Tax Base proposal, whereby companies with operations around the EU can limit tax liability to one corporate center.
Well-known companies with operational headquarters in the Republic of Ireland include Google, Facebook, and Intel. Cost calculation and global pricing strategy Setting the price for your products and services can present challenges when doing business overseas and should be another major consideration of your strategy.
You must consider costs to remain competitive, while still ensuring profit. Researching the prices of direct, local-market competitors can give you a benchmark, however, it remains essential to ensure the math still works in your favor.
For instance, the cost of production and shipping, labor, marketing, and distribution, as well as your margin, must be a taken into account for your business to be viable.
Pricing can also come down to how you choose to position your brand — should the cost of your product reflect luxury status? Or will low prices help you to penetrate a new market? Swedish furniture giant Ikea, known in Europe for its low-cost value, struggled initially in China due to local competitor costs of labor and production being much cheaper.
By relocating production for the Chinese market and using more locally sourced materials, the company was able to successfully cut prices to better reflect its brand and boost sales among target consumers.However, as an international student you can also have an advantage by knowing the culture of your home country, learning the culture of your place of study, and observing the cultures of the other international students you will meet in one of the many top schools for business.
Businesses look for future employees with cultural experiences, and some are even offering cross cultural awareness . Go Global Youth Programs Ignite your students’ interest in Asia and the importance of developing global competencies. Cultural awareness involves recognizing different beliefs, values and customs that other people have that are based on their origins or upbringings.
Cultural awareness positions people to be more successful in both personal and professional relationships. The Journal of Instructional Pedagogies (JIP) publishes original academic research related to contemporary instructional techniques and education issues. Educational topics related to delivery methods, implementation of classroom technologies, distance learning, class activities and assessment are typical topics.
International expansion has opened numerous doors for small businesses looking to uncover new streams of revenue. Mar 06, · In order to benefit from the ideas of global thinking and cultural understanding, firms need to develop three types of assets: intellectual, social, psychological.