When you take a vacation to a different country, you spend a lot of time researching the culture -everything from the food to cultural customs such as tipping in restaurants or conducting yourself at historic sites. So why shouldn’t you do the same when looking to expand your business?
As you look into market potential, labor costs and building codes, don’t ignore the cultural implications of doing business in that country. Research what cultural, ethical and legal differences exist, and come up with a strategy to navigate them. Building respectful, culturally appropriate relationships is crucial to the success of your new venture.
One idea: to help develop global savviness, find locals to be your guide. When searching for consultants, accountants or law firms in the new country, for example, look for firms that have previous experience helping foreign companies make a successful transition. Make contacts in expat business communities or look for government or economic agencies that specialize in international relations.
As you make these connections, there are three vital questions you should ask to ensure your business doesn’t run afoul of hidden traditions, considerations or business practices.
1. How are contracts negotiated, structured and agreed upon?
Business laws and contract requirements vary wildly across the globe. Besides the differences in ethical, legal and structural requirements, there are often specific cultural conventions in play. For example, in some Latin American regions, a verbal commitment and a handshake is more important than the paper. In fact, too much emphasis on a paper contract could turn off potential business contacts because they view a verbal commitment as being more trustworthy. Finding the right legal representation in the country is key to handling this process correctly.
2. What expectations do employees have about office culture?
In the US, cube farms are so plentiful, they have become a part of our culture (and our pop culture). However, cubes are not necessarily an accepted office setup in other countries. As I discussed in No Such Thing As Small Talk, 7 Keys to Understanding German Business Culture, in Germany, legally, employees must be able to look out a window. It’s also more common for Germans to work quietly at their tables so they don’t need the noise buffer of cubical walls. When they do have conversations, they’ll move to a meeting room or take a break in the coffee corner. (They don’t spend as much time speaking with others while working as we do here in America.) Ignoring these cultural differences can result in confusion and even foster aversion to cooperation.
3. What are the unique HR considerations we need to consider?
So many cultural aspects affect your HR policies and procedures in a new country, from hiring practices and acceptable interview questions to the employee holiday calendar. In the US, we have guidelines about what you can and can’t ask during the application or interview process. But these restrictions don’t exist in other places. In India and some European countries, it’s common for applicants to submit photos and include things like age and marital status.
With some countries, radical cultural differences and cultural sensitivity plays an even bigger role in HR. In South Africa, healthcare plays a large factor. For instance, it’s common to have mandatory HIV testing for employees on the shop floor. And therefore, sadly, funerals are important affairs in South Africa. When an employee requests time off for a death, they can expect to have up to two weeks of leave.
Opening your organization to a global mindset unlocks endless possibilities for professional—and personal—enrichment. But global savviness does not happen overnight; it requires patience, an open mind and above all, respect for those around you.
Contact us for more answers to your questions about global expansion: firstname.lastname@example.org