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International business management can be a singularly difficult task. There are global consumer trends to consider and unique challenges to overcome.
Complex, multinational businesses are a “new normal” in today’s digitally empowered economy. Subsequently, international best practices are more important than ever before.
There are many ways to manage an international business, especially if it is very large. Today, we’ll cover some of the most important ones.
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Introduction to International Business Management
International business optimism is high. Global trade’s value reached a record 28.5 trillion USD in 2021 – 13% higher than in 2019, before the Covid-19 pandemic tore through the world.
Companies remain bullish on boosting cross-border activity despite the increase of protectionist policies in some nations and the impact of Brexit.
To ride the wave of global trade, managers and executives need to familiarize themselves with the skills and tools they will require to tap into overseas markets. Let’s get started.
Keys to Smoother International Business Management
From understanding international laws to mastering cultural etiquettes, here are the keys to unlock a smoother business process.
1. Understand Currency Exchange and Inflation Rates
International businesses will receive payments from more than one nation. The value of a dollar will vary across currencies and fluctuate frequently. This poses one of the trickiest problems to such companies, especially for reconciliation.
You should familiarize yourself with currency exchange and inflation rates of the countries in which your business operates.
Inflation rates will influence the product pricing through the prices of labor and commodities.
Monitoring both these rates will provide crucial insights into the market value of your services and products across countries.
A reliable way to make your reconciliation easier is to use cutting-edge reconciliation automation software such as CrushErrors. It works better than your Excel sheet and can save you hundreds of hours.
2. Keep Everyone on the Same Page
To avoid project delays and keep everyone on the same page, team members posted in different countries should be given the opportunity to regularly participate in meetings.
The simplest solution is finding a time that suits everyone and scheduling a weekly meeting accordingly. Use this time to collaborate on projects, provide updates on progress, and address challenges.
If the meeting time falls outside some people’s regular hours, let them know how you will compensate them for their extra work.
It is always a good idea to record important meetings so that team members who cannot attend them can still know what happened.
3. Manage Supply Chain Risks
The Covid-19 pandemic (as well as the Ever Given incident) threw into sharp relief just how fragile some of our supply chains are.
International laws and foreign legislations steer the logistics of exports, imports and offshore shipping. Mismanagement of supply chains, especially if you source products or services from overseas, can pose a significant threat to your business.
Your supply chain strategy should be tailored to your business requirements as well as the locations you want to expand in. This will involve knowing the local existing supply chains, trade regulations, material availability, and external influences.
Another important aspect includes mapping your supply chain from beginning to end – low visibility is one of the key reasons for disruptions and delays. Use sensor input, data and real-time monitoring for this.
4. Tax Compliance Issues
No one wants to hear “tax compliance issues”, but it’s important to know how to deal with this issue in international business management.
The more countries you operate in and sell to, the more tax rates, commercial fees, and regulations you will have to familiarize yourself with. Failing to do so can result in hefty charges – or expensive lawsuits.
5. Use Accessible Technology Solutions
There are several technology solutions available for remote work and hybrid work – both of which apply in some way to international business management.
Try using a single platform to aid in communication.
Consider the Internet access and technology available to all members of the team.
Project management software such as Jira is also useful. These tools help you assign tasks, plan and discuss projects, set deadlines and track progress.
Look for the following in collaboration software:
Instant messaging or chat
Shared calendar to streamline meetings
Presence indicator so team members can see who’s available, away, busy or offline in case they need to ask a question, set a meeting, and so on
Easy uploads and document sharing
Integrated recording function
6. Check In Often
Regular follow-ups and check-ins can improve team engagement. However, it is important that this does not devolve into micromanaging.
Follow a regular meeting schedule.
For important deadlines or projects, it is always best to schedule a call (in person or through video).
If possible, travel to international business locations or offices for face-to-face meetings.
Give constructive feedback for projects and tasks. Do not insult or demotivate your team members. Instead, use the “sandwich method” of praise, followed by constructive criticism, followed by praise.
7. Manage Language Barriers
In an international business, it is highly likely you will deal with clients whose first language differs from yours. This can lead to chaos at best and lawsuits at worst, if one is not careful.
Hire employees who are fluent in the relevant language(s).
Employ a local, or at least someone fluent in the relevant language, to verify employment contracts. In certain countries, the contracts must be written in the local language, as per labor laws.
International business management can be challenging. However, the rewards can be even greater, not just in terms of profits, but in terms of global talent and diverse viewpoints and experiences.
When you expand into a new nation, it is always wise not to crash in. Efficient scheduling, clear communication, and the appropriate technology can go a long way in avoiding the mayhem that can come with international business.
It goes without saying that one must also adapt to local ways of doing business. This way, you establish yourself not as an invader, but as a member of the local industry. More opportunities will open themselves to companies that operate with such grace.
International business management will, of course, become far smoother with daily reconciliation. NextGen Accounting offers bank reconciliation services, credit card reconciliation services, and consulting services.
To give you the most accurate and fastest reconciliation, we use our patented software CrushErrors, which you can also obtain as a product if you’d rather conduct reconciliations in-house.
NextGen Accounting’s management team has decades of experience and includes former executives of Barclays Bank, Bank of America, and ICBC. Contact us today for reconciliation services or book a free demo if you’d like to get CrushErrors!