Going Abroad 2014

3 Solutions
3.1 What should you do before going international?

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.

3.2 What rules have to be followed during international contact?

“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.

References

1 Bordas Juana (2012): Salsa, Soul, and Spirit: Leadership for a Multicultural Age; Berrett-Koehler Publishing San Francisco, Expand. Edition

2 Calle Jeri (2001): Mixing Work With Pleasure, Smartpros Ltd published online. Retrieved 10. Sep. 2012 from www.smartpros.com/x28745.xml

3 Cappelli Peter, Singh Harbir, Singh Jitendra, and Useem Michael (2010): The India Way: Lessons for the U.S.; ACAD MANAGE PERSPECT May 1, 2010 24:6-24

4 Copeland, Lennie/ Griggs, Lewis: Going International: How to Make Friends and Deal Effectively in the Global Marketplace; Plume Printing 1985; Auburn, WA, USA

5 Bundesministerium für Arbeit und Soziales (2011) : Statistisches Taschenbuch 2011, Bonn

6 Daniels, John D./ Lee H. Radebaugh: “International Business- Environments and Operations”, Ninth Edition; Hall, Prentice 1991;

7 Grosse, Robert/ Kujawa Duane: “International Business: Theory and Managerial Applications”; McGraw-Hill-Irwin 1995;

8 House, R.J.; Hanges, P.J.; Mansour, J.; Dorfman, P.W.; Gupta, V. (eds.) (2004): Culture, Leadership, and Organizations - The GLOBE Study of 62 Societies, Sage Publ., Thousand Oaks, 2004

9 Masour Javidan, Peter W. Dorfman, Mary Sully De Luque, and Robert J. House (2006): In the Eye of the Beholder: Cross Cultural Lessons in Leadership from Project GLOBE.ACAD MANAGE PERSPECT February 1, 2006 20:67-90

10 Mendenhall, Mark/ Punnett, Betty Jane/ Ricks, David: „Global Management“; Cambridge Blackwell Publishers 1995

11 Pless, N. M. (2007): Understanding Responsible Leadership: Roles Identity and Motivational

12 Drivers, in: Journal of Business Ethics, 74(4), 437-456

13 Zelimir William Todorovic, Jun Ma, (2008) "Entrepreneurial and market orientation relationship to performance: The multicultural perspective", Journal of Enterprising Communities: People and Places in the Global Economy, Vol. 2 Iss: 1, pp.21 – 36

Getting Started
How to make things happen abroad?

Katrin Summ, Sonja Burgmeier

Abstract This 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.

1 Going into foreign business – reasons and obstacles

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.

1.1 Reasons for going international

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.

1.1.1 Wrong reasons

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.

1.2 Obstacles

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.

2 Finding partners and customers abroad

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.

Analyze the characteristics of your existing partners in your home country: What types of companies are they in terms of company size, structure, branch of business? Do these companies have branches in other countries? Do similar types of companies exist internationally? Examining the structure of your existing partners can also mean finding out more about their competitors.

Contacting business colleagues and other expats is a very good way to get informed. A person with first-hand experience in an international market may give a personal recommendation for a potential buyer or a distributor. The recommendation against a certain customer for credit or reliability reasons may save the company a number of problems. An excellent method of networking and establishing contacts with business people, who have international experience, is attending trade shows or export seminars.

A large number of publications such as magazines or directories, which list and qualify international companies, are available. You can either find other companies there or promote your own products or services, which might generate responses. Magazines range from specialized international magazines relating to individual industries such as construction or textiles to worldwide industrial magazines covering many industries. Trade associations, business libraries and major universities may provide these publications.

Radio, television, or various forms of outdoor advertising (posters, electric signs, and billboards) may also be used for promoting products or services, as they bring an advertising message to a great number of people.

Another good tip is to join some of the international business chambers, for instance the British-American Chamber of Commerce in the UK. These chambers function much like a local chamber and offer similar networking opportunities. You can also contact foreign embassies in your home country. They have directories of firms located in their countries and can provide written information. Their commercial officers can also counsel you. Furthermore, the diplomatic service of your country abroad can help you with their commercial officers.

If your company is located in the United States, for instance, you can make use of the U.S. and Foreign Commercial Service that delivers a very valuable service. It is part of the International Trade Administration of the Department of Commerce and promotes U.S. export trade. You can meet with a trade specialist who gives you information about the best markets for your business. This is an easy, cheap, and productive way of making contact.

3 Contacting international counterparts

After identifying potential counterparts, the next step will be to contact them. The initial contact should be in writing followed by an appointment to meet in person. Although communication in writing might be hard and frustrating work, it is the best and necessary way for getting in touch with new contacts, especially those that are in foreign countries. Following some general guidelines concerning the format, language, and content will produce the right letter/mail – and hopefully get a response.

3.1 The letter format

Several significant points should be known about letter formats. Since the goal of this letter is future cooperation, it counts as the first impression. Using proper stationary with the company letterhead will make a good impression on the receiver. It is important to spell names correctly, check and double check to make sure, as people can be easily offended by mistakes with their names. The same applies to making sure the correct title of the person is written.

Also keep in mind that countries use letterheads and addresses in very different ways. First and last names can be reversed, street addresses, zip codes, provinces, cities, may all be presented in a different order than in your own country. Make sure it is written correctly so that mishaps in delivery will not take place. To avoid confusion on the other side, your own name and address should be written in the format used in your own country.

3.1.1 Language

Since English is the universal language of commerce, correspondence should be in English. However, consideration might be given to including a translation into the recipient’s language. This would make the letter more “readable” should the recipient’s English not be up to par, and it might be seen as a gesture on your part to accommodate your potential partner. Furthermore, a good translation will avoid any possible misunderstanding of the content of the letter. You can find assistance for translations at certain service providers such as banks, freight forwarders, or commercial translators who are hired on a fee-basis. Other sources could be colleges or universities or even your own company’s translation department. If English is not your native language, using the help of translators on your side would be advised.

Most countries, including Europe, have a very formal and traditional tone and writing style, whereas U.S. letters are less formal. Keep in mind that when the tone and style of the writer differ greatly from those used by the recipient, an intended positive message could be received in a more negative way.

3.1.2 Content

If you would like to contact customers, an introduction letter is common. It is especially effective if it comes from a third party that knows the recipient and has some influence on him. This letter should be written as a letter of recommendation. The company should draft the letter to make sure it contains the necessary information. It usually starts with the profile of the firm, followed by reasons for contacting and finishes with the hope that an appointment for a meeting can be made. In the profile, details may be included, for example the number of employees, products, references, and in some cases C.I.F. prices in U.S. dollars at the nearest port to the recipient. If you want to include more details, particularly technical ones, do this with an attachment.

3.1.3 Reactions to your first letter

After the first letter has been sent, you should remember that failure to answer does not always mean a lack of interest. In some countries it might take a long time to receive an answer because they have a lot more problems with communication, transportation, etc. Having received an answer, it is again your turn to reply promptly, completely, and clearly, even if it is a rejection.

3.2 Making an appointment

After you have successfully introduced yourself and your company, you will start planning an appointment. Although the telecommunication revolution permits quick correspondence with business partners and enables you to stay in constant touch, as mentioned above personal contact is absolutely necessary to build a good relationship. When making appointments the following should be considered.

4 Getting prepared for the first visit

It is highly recommended to visit prospective business partners in order to make personal contacts and build trust. Like in domestic business, face-to-face meetings with partners are the best form of business contact. By traveling abroad, you can also examine the markets where you are considering selling your products, and your company can familiarize itself with the foreign culture. This might impact the design and advertising of a product. Moreover, additional new partners can be located and communication with existing business partners can be improved.

It is not uncommon for this initial trip to result in no finalized business and little chance of closing sales in the future. However, the expenses incurred for such a trip are well worth the money since further steps cannot be taken without this initial trip.

4.1 Learn about the laws and regulations

As in every country, the government influences foreign business by its own laws and regulations. It is crucial to be knowledgeable of the limitations in a country before visiting. For instance, in a centralized economy, direct contacts to companies are difficult, as the decision making is centralized. Initial contact is made via intermediaries (foreign trade organizations or foreign trade corporations) who evaluate the commercial aspects of a potential import like price, payment terms, quality, etc. Before contacting a company it is very important to find out how much authority it has.

A business trip can be turned into a major success for your company if it is well prepared. For example, general knowledge of the country and business practices researched ahead of time will not only facilitate the visit, but a good impression of your company will be left behind. Research material is available for every country (e.g. at embassies or in the Internet), so there is no excuse for entering international business unprepared. In general, flexibility and cultural sensitivity should be the guiding principles for traveling abroad on business. More detailed information for various countries on social etiquette and business practices will be covered later in this book.

4.2 Prior scheduling

Appointments need to be scheduled before traveling to the country. It is not advisable to try to get an appointment after you have already arrived in the country. Even if the right people are available, which is unlikely, they prefer appointments. Once you have sent your introduction letter, you can ask for an appointment in another letter. Try to follow up this letter and get in touch with a secretary to remind her of the letter and to ask for an appointment.

4.3 Meeting the right person

When asking for an appointment, you have to know whom you would like to meet. Too often, a visit is wasted because the counterpart does not have enough responsibility to make decisions. In general, compare the contact company with your own one. Get to know the hierarchy of the company and choose the highest manager possible. However, beware that there is a problem with going too high. The problem of going too high is that the highest managers have the power to make an early rejection, which cannot be changed later.

Many countries are very status-conscious even for first appointments, which means that all participants of a meeting should have the same status. It would be an offense to send someone beneath the counterpart’s position, as that would mean that the meeting is not very important.

In some countries, especially in Asia, an intermediary may be necessary for a successful contact. One possibility is to hire a contact from your industry to introduce you. The contact adds credibility and security to the first meeting and the right contact may even be all that you need for a positive outcome.

5 Travel preparation

A successful business trip requires months of planning. Start planning your trip at least one month in advance. It is never too early to reserve flights and hotels. The reservations can always be changed. Otherwise you might be in a situation where you have arranged all your meetings abroad and then cannot get a flight. As you plan your business trip, you have to consider the following:

5.1 Planning the itinerary

Travel plans should reflect goals and priorities. What does your company want you to achieve with that trip or project?

Pay attention to local holidays and work hours. For example, in some countries, Fridays are non-working days, and everything may close down during “siesta” time. Not having this information could mean time wasted by planning poorly.

Try to plan meetings with several business partners to make the trip more cost efficient. Arrange two or three meetings a day and try to vary them, for example one breakfast meeting, one meeting in the office etc.

Before you start planning various meetings, look at a good map of the area and check how much time will be needed to get from one point to the other in order to plan your meetings efficiently. The meetings should be arranged in a way that does not keep you “zigzagging” around the country. You should also find out if good public transport facilities are available and check transportation schedules. If possible, you can arrange transport in advance.

A well-planned itinerary enables you to make the best possible use of time abroad. Business travel is expensive and your time is valuable, but an overloaded schedule can be counterproductive, as you would only rush from meeting to meeting. If possible, at least one extra rest day before meetings should be planned in order to compensate for jet lag. It is also helpful to get familiar with the new environment.

Check whether you can incorporate a useful trade show or exhibition into your itinerary, as you can make additional contacts.

The schedule should be kept flexible for both unexpected problems (such as transportation delays) and unexpected opportunities. For instance, accepting an unexpected lunch invitation should not make it necessary to miss the next scheduled meeting.

It is advisable to let your work colleagues know about your business trip and itinerary; do not treat it as a secret. They might already have useful contacts to people you are going to meet, or they can give you some good hints about traveling in a certain area because they had their own business trip. Perhaps they have a good map and can give you additional important information.

When you have scheduled appointments, you should fill in your itinerary with all necessary information: company, contact names, position, address and phone details. You should also add further useful information like a short company profile, web site, and the travel directions.

It is advisable to have transportation and hotel reservations arranged by travel agents, as they work professionally and quickly. They can obtain the best travel rates, know which countries require visas, advice on hotel locations and rates, and provide other valuable services.