Overseas business challenge: the quality of management
January 22, 2014 00:00 By Yanyong Thammatucharee 3,805 Viewed
For many companies, managing overseas businesses is a new challenge. But it is something that cannot be avoided if a business wants to grow outside the current marketplace. Besides quality products, good service, strong brands and capital, a company needs
To have a good operation in another country, a company has to allocate resources required through the normal process of business planning for both short and long terms. Unfortunately, getting a business going in an overseas location can be slow because of the following:
l Lack of effective communication. Routine communications can be made through e-mail, telephone calls and so on. But to ensure that business issues have been addressed in the most effective and efficient manner, a strong communication pattern should be considered. This can be in the form of regular meetings, reporting and conferences. The opportunity to exchange ideas and information should be opened for both local and headquarters people. Without this effective communication system, chances are local issues cannot be recognised and costly damage can be made before they are disclosed.
l Lack of effective decision-making. Because of the new rules of the game in the new market, decision-makers tend to be cautious and draw a conclusion from existing experiences. This could negatively and unintentionally lead in the wrong direction. Listening to local people’s opinions and evaluating them properly could be an input for better decision-making. An important question is how can management learn to improve decision-making skills in the new market to keep pace with the dynamic environment.
l Lack of speed. Under the highly competing circumstances overseas, management needs to accelerate workflow involving several functions including production, marketing, human resources and finance.
The bottleneck should be identified and fixed as soon as possible.
Grasping opportunities in other countries may require a new methodology
in dealing with the challenges.
l Lack of follow-up. Operating waste may exist in the company and keep undermining operating efficiency. A good follow-up system should be established to ensure that all important issues get resolved within a proper time frame. It is worth considering that allocated resources are made available to tackle those pending items.
For a new company set up under an approved business plan, the process may start with engaging a local person to form a partnership. Then the process of business-entity formation must be started, taking into account the legal aspects and constraints. After that employees at both the operating and management level must be recruited according to the organisation structured designed.
Information and operating systems must be considered based on the expected growth of the business and local requirements.
Once the business is off the ground, merchandising, logistics and financial topics must be discussed for effectiveness and efficiency.
This is a brief review of a possible course for establishing a business overseas.
Simple management issues may not be as simple as they sound once the company falls into a situation that it is too serious and too late to resolve in a cost-effective manner. To establish a good-quality management team for overseas business requires a new paradigm from the existing management team.
However, this may also require dramatic changes and can be hard to make happen. In such a situation, a company may choose to get help from outside experts who can provide fresh insight and different perspectives. Being prepared to respond to unforeseen challenges can be a good tip for new international business establishment.
Yanyong Thammatucharee is senior vice president for accounting and finance at Central Marketing Group. He can be reached at email@example.com.