A Model for Expanding Your Business Into Foreign Markets

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Harvard Business Review, 5/17/24:  It used to be thought that globalization would flatten out cultural differences among countries and regions of the world, making it easier than ever for companies to move into foreign markets. 

According to a new study by the author [Joshua Conrad Jackson] and a colleague, however, cultural differences are greater today than they were 40 years ago, which explains why some major corporations have failed in their recent efforts to establish a foothold in new countries.

Companies need to adapt, the author argues, and to that end in this article he presents a general model for global leadership in the face of cultural divergence.

A Model for Expanding Your Business into Foreign Markets (HBR)

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In May, 2024, it was thought that globalization would flatten out cultural differences among countries and regions of the world, making it easier than ever for companies to move into foreign markets.

According to a study by the author Joshua Conrad Jack and a colleague, however, cultural differences are greater today than they were 40 years ago, which explains why some major corporations have failed in their recent efforts to establish a foothold in new countries. 

Companies need to adapt, the author argues, and to that end in this article he presents a general model for global leadership in the face of cultural divergence.

Joshua Conrad Jack is a Neubauer Family Assistant Professor at the University of Chicago’s Booth School of Business.  Other articles by him.

Today in Global Small Business: Leveraging the IoT For Exponential Global Growth

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What's affecting me, my clients, my colleagues and other global small business owners:

• Global expansion offers businesses leveraging the Internet of Things (IoT) the potential for exponential global growth, enhanced market reach, and a broader customer base.
• Secretary Blinken announced New Zealand as the latest donor partner to join the Global Equality Fund (GEF), protecting human rights with a new international partner.
• Brands that are looking for long-term growth and success need to expand their brand internationally at some point.
• Quote of the week: “Like air and drinking water, being digital will be noticed only by its absence, not its presence." – Nicholas Negroponte
• Cultural differences can guide best practices when expanding internationally. It's up to company leaders to make sure their teams are well-prepared.
• Go global if you can beat local.

Going Global Doesn't Have to be Complicated

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To go global, businesses must navigate complex regulatory environments, cultural differences, language barriers, and logistical issues, not to mention the task of finding customers and getting paid.

Given the potential benefits of expanding internationally, the effort is worth it on mastering the above.

How can businesses best prepare for and navigate the inherent challenges of global growth?  Prepare a global strategy and take the time to consider all aspects of going global to ensure success. 

How to Practice Cultural Humility

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"When it comes to going global, American associations make a lot of U.S.-centric mistakes," says Mark Athitakis.  

They possess ideas about membership, meetings, partnerships, marketing, and more that make perfect sense in America but may not apply in different countries and regions. And as diversity, equity, and inclusion (DEI) becomes a norm in organizations, it may become another source of potential friction.

If one is on an early path to globalization, Athitakis recommends you practice cultural humility.  You ought to first recognize that any global effort needs to be based on understanding not only the strategic role a new country or region might play in their efforts but also the inherent cultural differences.

Communicating with a Global Workforce

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Companies will only get more global as communication across the world becomes easier. We must ensure that cultural differences are not assumed but understood.

Read on to learn how to communicate with a global workforce. 

Understanding Cultural Awareness and Diversity in Global Business

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Awareness and recognition of unique cultural behavioral differences, along with a global mindset, can further encourage shared understanding and enhance flexible thinking and communication.  It also allows you to conduct business the world over in a seamless fashion.

Here are five (5) cross-cultural communication tips for global teams.  You might also consider reading "navigating the cultural minefield" by Erin Meyer to better understand how cultural differences affect global business.

Understanding Cultural Differences in Global Business and Appreciating Why Relationships Matter

Is There No Such Thing As a Simple Global Marketing Strategy?

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Today’s international frontline marketers have quickly learned that there is no such thing as a simple global marketing strategy. They know that local nuances and cultural differences can put the kibosh on—or put an end to, make less effective, insert local phrase here—even the most well-meaning of top-down strategies. At least that is what Lauren McMenemy says.

Is a global marketing strategy really necessary for your business? If you were to develop an ad campaign in the United States, do you think the same campaign would be effective in France? In this article Laurel Delaney examines why it’s important to create a global marketing strategy for your business (no matter what size it is) and what the benefits are to crafting one.

Meanwhile, you can read Lauren's entire article about how a great global marketing strategy rests on local execution.

What is Depleting America of the Diversity, Nuances and Strength That Made It Great?

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According to the Kauffman Foundation, immigrants are twice as likely to start businesses in the United States than American-born citizens.

However, because the Department of Homeland Security is rescinding the Obama Administration’s International Entrepreneur Rule, which allowed foreign-born entrepreneurs to stay in the US for up to five years to expand their businesses, immigrant entrepreneurship is declining. 

Not only does this hurt aspiring immigrant and international business owners everywhere, it decreases the creation of thousands of jobs, and depletes America of the diversity, nuances, and strength that made it great.

Read more about how founder are making Silicon Valley borderless for immigrant and international entrepreneurs.

Good quote:  "The companies that really want to have a global impact need to understand cultural differences."

Cultural Differences: So Many Questions To Ask

The Challenges of International Business

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Expanding your business internationally is no walk in the park.  If it were, everyone would be doing it.  Yes, there are some challenges -- from finding customers to getting paid to language/cultural differences.  But with the right mindset, a little preparation and a healthy dose of perseverance, you can master taking your business across borders, I promise.  Here are some challenges you should prepare for before going global.

Is International Experience Relevant For Supply Chain Work?

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Here's the question posed by Spend Matters to Subhash Segireddy, who works on supply chain network design at Cisco.

"You’ve worked with a number of international, multicultural teams, and this applies to other “30 Under 30” [ISM/Thomasnet.com 30 Under 30 Rising Supply Chain Stars Recognition Program] winners, as well. Pretty much any field can claim “international experience” as a plus, but do you think it is especially relevant for supply chain? What are some of the biggest lessons you’ve learned by working on multicultural teams?"

Here's what Segireddy says:

Supply chain organizations are usually global, and being aware of cultural differences is very critical. A simple example is understanding the stories behind the holidays across different cultures. Working in global teams helped me bridge cultural differences and deliver results. The biggest lesson [I’ve learned is] that no two individuals are the same, especially if they are from different cultures. Being aware of this has helped me strengthen my leadership, problem solving and communication skills.

Read more ...

Why Culture Matters in Global Business

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Ever have a communication problem with someone you are working with overseas?  Who hasn't.  You know how it goes.  You say one thing.  The party you are communicating with agrees and several days later, things are done exactly counter to what you discussed!  Is it because they ignored you?  Didn't like your strategy?  Wanted to do things on their own terms?  Not likely because why would they choose to do business with you?  It all boils down to cultural differences.

Mark Hehl from The Desara Group has some points to offer on the importance of culture when conducting business overseas.

Intro:

Conducting business on a global basis requires a good understanding of different cultures.  What works in your country might not work well in another and might even be interpreted as an insult. One of the many roles of an effective project manager is to raise the awareness of cultural issues within your project team and your organization to ensure success.

Read the entire article:  The Importance of Culture when Conducting Business Overseas

Related articles:  Communicating Across Cultures and How to Deal With Cultural Differences

Note:  I discuss Communicating with Cultural Intelligence at great length in Chapter 24 of my new book, "Exporting:  The Definitive Guide to Selling Abroad Profitably" due out December 18, 2013 by Apress.

Bribes, Red Tape and Cultural Differences

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OPEN Forum offered by American Express and under Anita Campbell's stewardship has my next entry up on bribes, red tape and cultural differences. It goes into great detail about whether there is a true opportunity for consultants in the United States to do business globally or is the opportunity primarily for product companies.

If you find it useful or wish to add to it, be sure to do so at the designated areas. Also, we placed an official badge on our blog to show all the OPEN Forum entries. Be sure to check out when time permits.