The issues of managing a business with locations around the world
Business is increasingly a global affair, with companies and customers easily interacting across borders. However, it is often more effective to serve customers in the location in which they are in, rather than remotely from a different country. Therefore, many businesses choose to open offices and production facilities in locations around the world so that they can be closer to their customers – increasing the amount of business that they do.
Problems affecting global business locations
Managing a global business requires a special set of skills. The problems that come up when working internationally can be very different from the local problems that you are used to facing. Economic and political factors in countries around the world can be difficult to predict: when these countries are still in the earlier stages of economic development, changes in circumstances can have dramatic and outsize effects on your business. The ability to evaluate future prospects in the country and making decisions based on that is absolutely key.
Even developed countries can undergo stress factors that are new to you. Natural disasters can be more commonplace, so insurance options should be carefully evaluated to prevent low-risk but high-exposure events from disrupting your business. It is important to keep in mind that even relatively small economic changes such as a depreciating currency can affect the long-term viability of your operation, and often it is foreseeing and planning for the effects that will keep your business in the black.
Doing business in a foreign culture
It is not only harsh economic realities that make operating a worldwide business challenging, but also softer issues such as cultural differences, norms and ways of working have been a stumbling block for many foreign companies operating a local office. The answer lies in patiently building an understanding of how the local population does business. When Mark Clannachan set up offices for BlueCrest in Europe, it was this understanding that made it easier to attract both employees and customers – and to keep them.
Miscommunication is another wider issue that comes up in global business operations. Often, the apparent efficiency of electronic communications such as email and messaging services can obscure the fact that they are not perfect tools for cross-border communications. Instead, make sure that at least some of the time, your employees meet face to face to foster better interpersonal relationships and a growing understanding of the business.
It is about managing risks
Even though cultural and communication issues are important, it is in fact your exposure to risk that you need to manage most carefully in a global business environment. Operating in different countries magnifies risk and also complicates it. In addition, your business becomes more interconnected, making it harder to predict the effects that one event in one location would have on operations located elsewhere. You can mitigate this, however, by carefully monitoring your different business locations, and by building a specific understanding of each and every local environment.