Waldemar Pfoertsch - Going Abroad 2014

In countries with greater power distance, consultation among superiors and subordinates does not take place. Subordinates are used to execute the work in the way they are told to by their boss. This is the case in South America and most parts of Asia. In Japan, for example, consultations take place on a horizontal level, but rarely between different layers. Participation in decision-making is a direct result of knowledge and not of the degree of responsibility. There is also a large difference in the degree of power distance among the countries of southern and northern Europe. Scandinavians as well as Germans and Austrians are often encouraged to take part in the process of decision-making and usually prefer a consultation style.

The following dialog shows a typical scenario where neither party is aware of the power distance of the other. The American boss (small power distance) wants to force his Greek subordinate (large power distance) to make his own decision while the Greek is waiting for exact directions from his boss. The result is tension between the two; both are irritated with the other.

What do they say and what do they think?

US says: “How long will it take you?”

Greek thinks: “He’s the boss, why doesn’t he tell me?” but says: “I don’t know. How long should it take?”

US thinks: “He refuses to take responsibility.” but says: “You should be able to analyze the time.”

Greek thinks: “I asked him for an order, now I have to give him an answer.”

A businessperson going abroad should be properly trained and have the required skills and sensitivities to cope with the particulars of a given culture. The costs of repairing a damage of one’s image or the negative impression one leaves behind, are much higher than the right preparation before leaving. Many things might seem to be similar, but when you take a closer look, you will find different nuances. Judging a culture by simple generalizations is not enough, try to look behind the first impression and analyze what influence lies behind it.

“When in Rome, do as the Romans do”. To some extent this expression is true, but you should not try to imitate a different culture or abandon your own values. Show respect to local customs, be sensitive and observe the way things are done in your host country. Try to integrate yourself and adapt to the way situations are dealt with. Keeping your eyes open and interpreting carefully what you see and also what you don’t see, is the right approach.

Most importantly, patronizing colleagues and employees will only lead to trouble. If you talk about and discuss problems, show respect for their point of view and ways of doing things, the foundation for a good working relationship will be laid.

THINK GLOBAL AND ACT GLOBAL.

Katrin Summ, Sonja Burgmeier

AbstractThis part is written on the premise that a company going abroad may be a consumer goods company or a business to business (B2B) company. The terms partners, consumers, counterparts are all used to refer to potential cooperating foreign companies.

It is not rare today for a company to want to go international and expand to different countries. Companies go international for a variety of reasons, but the goal is typically company growth or expansion. Whether a company hires international employees or searches for new markets abroad, an international strategy can help diversify and expand a business.

One very important reason for going global is for a firm to explore and develop new markets. In the ideal case this would be followed by an increase of sales revenues. Going abroad is sometimes the only way to develop new profit centers with increased sale of products or services. A company can compete effectively in the global marketplace and be in a much better position, both at home and abroad, in maintaining the competitive edge. It has the possibility to build and strengthen relationships with the counterpart organizations overseas, and once it has established itself and found businesses and partners to work with, it is much easier to exchange ideas and expertise on a global level. There is a good chance to gain industrial expertise and experience from strategic alliances, partnerships, or memberships.

Some reasons appear very reasonable and promising at first, but they could be the wrong reasons to go abroad. Do not go international and choose a country because it has a large population. This does not necessarily mean a big market for your company. First of all, there may not be enough skilled workers to hire to do the work your company needs. Infrastructure needs to be checked carefully to see if the system of education and the academic and technical knowledge that is offered are sufficient. It would not be wise to have to invest a huge sum just to get the right infrastructure for your manufacturing and marketing. Not even cheap labor can make up for these huge investments.

Secondly, marketing studies must show that consumers are willing and able to buy the services and products offered. It is much easier to meet a need that already exists than to create the need. Thirdly, do not blindly follow another company going into a foreign market, with the attitude that if they can do it, you could also. Each company should follow its own business strategy.

Once established abroad, the biggest obstacle to success presents itself – dealing with cultural differences. Despite what seems to be adequate cross-cultural training, the surprises and challenges that emerge can be quite morally discouraging and financially costly. Potential consumers may not have been evaluated correctly; competition may prove to be stiffer, local staffing may prove to be difficult. Some surprises can be quite out of one’s control: natural disasters, government changes – a company must be prepared for all of the above.

When the decision has been made to go international, new business partners and customers need to be found. The following resources should be explored:

Start by searching the Internet. This is a very inexpensive and easy way to find potential business partners, as today nearly every company has its own website where you can find principal information about the company and the products they offer.

It is just as important to have a website of your company on which you present your products. The website should be available in English so that an international audience can be reached. To facilitate communication, provide a contact form on the site where potential customers can leave their phone number, mailing address, etc.

Participate in trade events such as trade shows, fairs, and exhibitions. Trade fairs are “shop windows” where thousands of companies from many countries display their goods and services. They serve as a marketplace where buyers and sellers can meet and thus provide a good opportunity to talk to potential business partners directly and to get information about various companies and their products. European companies frequently conduct business at trade shows. Expose own products in a trade show to present them to an overseas market. This requires preparation and commitment, but it is a very cost-effective way to find new customers. This is also a chance to learn about competitors in the marketplace.