Opening and operating any business has its share of challenges, but in an increasingly globalized business environment, where offices are being opened oversees and in foreign countries every day, the difficulties are magnified. Solid research, vigilant planning co-ordination, clear communication and solid leadership need to be considered before expanding into international markets and allocating resources there.
Studying abroad, earning an MBA, and investing the time in learning about a different culture increases the probability of success in international business, but what other challenges stand in the way of entering the global business market? GBSB Global Business School is recognized as one of the most innovative business schools in Europe where the curriculum reflects the present market demand. GBSB is the only business school in Spain where regional studies are taught, highlighting cultural diversity in business, preparing students for particular market setbacks. Classes such as "Doing Business in Africa", "Doing Business in Latina America" and "Doing Business in Asia and Middle East" are taught by GBSB professors, professionals in their field, who have owned and operated companies within these regions and others. Their wisdom and insight in the marketplace can provide firsthand experience, minimizing the costs, time and headache for future entrepreneurs and business owners.
Every country has its quirks and ways of doing business, but from the outset if you do not understand the true market need from the beginning, there is no reason to invest time, money, and resources into a region. Knowing your customer is the first step of many, navigating the international business landscape. What products or services will or will not sell to your potential consumer will determine if the investment will ultimately see a return.
There will always be a learning curve. Every country has red tape, administrative and bureaucratic tasks, that more likely than not are different from your home country. In the western world you will be able to draw upon some similarities, but there will also be differences, and it is important to read the proverbial "fine print". What may be quick and easy in one country will take time in another. Everything from opening a bank account to getting licenses and contracting vendors can take weeks or even months. Some processes are automated but not all, and it is important to have an administration team in place in the new market to supervise these affairs.
Cultural considerations may be underestimated, but as Jamie Stewart, UK Marketing Director at Exact wrote, "managing the cultural implications of international expansion is a non-negotiable ingredient for its (a business’) success". Learning the language or communicating in a common tongue is an advantage, but is also imperative to realize not all of the intricacies of a language and the cultural gestures, such as eye contact, tone of voice, and context of humor will be understood by both parties.
The act of doing business and the managerial hierarchy will also be different. Deviations can be seen in the way employees from various backgrounds challenge authority, resolve conflict, manage personnel, and handle members of the opposite sex.
Differences, east versus west, in regards to human resources can be noticed in work ethic, not that one culture is right or wrong, but acknowledging that many eastern cultures and their workforce like to follow instructions and to know exactly what is expected of them. This is obviously different to many western firms where managers delegate responsibility and have flexible lines of authority. In this dimension employees typically take initiative whereas their eastern counterpart could be identified as lazy, yet this is not the case. Before hitting this glitch put a clear set of procedures and expectations in place. Provide incentives for astounding work and disciplinary measures in effect for suboptimal performance. Don’t micromanage, but have policies in place where employees work as a team with an accountable leader that will report back and can also be a significant figure in motivating individuals to be creative and work hard.
Guanxi, a word that means relationships in Chinese, describes one aspect of business that often western companies overlook, having a lesser importance than marketing or sales. Success or failure can be determined by those individuals you build strong relationships with. Taking the time to learn the customs will more adequately prepare you for doing business.
So often in the west casual meetings in boardrooms are enough to seal the commitment of an investment firm or contract a producer of goods, but that is not the case in places like China where it takes patience and perseverance to build a deeper relationship that goes beyond office talk. Many societies around the globe prefer to spend time outside the workplace taking tea or having dinner and drinks. Of course, building these types of relationships take effort, but it is time well spent, from governmental agencies to trade bureaus, these individuals and syndicates will be loyal advocates in the future.
Having these global challenges in mind when deciding where to study is important. One, living abroad, immersing oneself in a foreign culture, understanding the local business culture, and its people will set you ahead of your peers vying for international managerial positions. It is also central to consider the school and if their business program offers classes that cover the various regions in the world and look at the specific markets of interest.
Participants in GBSB Global Business School’s MBA degree program learn to develop greater cultural sensitivity and cultural awareness. GBSB Global Business School professors and faculty teach students to work comfortably and efficiently with people who have different values and behaviors. The MBA program curriculum ensures that future business leaders acquire skills and sensitivities which constitute a kind of cultural intelligence – the ability to understand and respond appropriately to cultural diversity in business, the unknown mannerisms, words, and gestures of people from different cultures, countries, and backgrounds.
By Emily Dawn Szajda, GBSB Content Manager