Martijn Tel of SiriusDecisions tells us why companies can make international expansion as hard or as easy as they want.
More than 45 million people are living in slavery, with Asia accounting for two thirds of the victims. To prevent slavery and increase supply chain transparency, the UK passed the Modern Slavery Act. Ensuring compliance is difficult, but a recent survey suggests that when a company leader takes a stand against slavery and exploitation, it has an effect that ripples throughout the workforce.
Welcome back to Global Glance. This week we look at how a Chinese insurance company may be changing the nature of M&As, FIFA’s surprising claim to victimhood, and a strange and lavish soccer school in rural China.
International expansion for young and fast-growing companies is a tricky proposition for a variety of reasons. Uncertainty surrounding revenue, profitability and market position can lead to conflicting priorities between management and board members. Furthermore, responsibility for managing rapid growth is rarely evenly distributed within an organization, and certain teams such as HR, finance and legal may be understaffed and overwhelmed by the administrative burdens associated with international expansion. Regardless of company size or profile, an organization generally decides to expand its international footprint for one or more of the four following reasons.
Since international business ventures don’t always go as planned, a business considering global expansion should understand the costs and time associated with winding down host-country operations in the event that corporate strategy changes.
“Don’t assume things work like in the U.S. and don’t take anything for granted.” - Larry Harding
That clear-eyed bit of advice came from a CEO at a consumer goods company, in response to a survey we conducted on the topic of global expansion. The survey, done in partnership with CFO Research, asked senior executives at small- and mid-sized businesses about the opportunities and challenges of opening overseas offices. Nearly 90% of the respondents were already operating overseas (the rest were considering expansion), and nearly two-thirds (65%) expected to be increasing their global footprint within a year of taking the survey.
Your firm doesn’t have to be sending people to work on deep-water oil rigs or in terrorist hot-spots to expose itself to legal and ethical risks when expanding overseas. In fact, you're more likely to find yourself dealing with more mundane threats, like food poisoning. Events like these serve as the most potent reminders of an international business’s duty of care to the employees it sends overseas.