Managing at a world-class level in a multicultural environment

Some overseas investments look very attractive, but running international businesses successfully can be challenging due to differences in many aspects, such as language, culture, expectation from the company’s headquarters, and so on. It is dangerous to think that what is applicable here can also be applied in another country.
Once two groups of people from different countries work together, there could be a clash or culture shock unless the working environment is properly managed. The following are possible actions to be considered to ensure that a company’s overseas operations will be managed properly.

Integration plan. In the case of a company having acquired an entity overseas, the start of business management should be planned through an integration approach between the two entities. This may involve identifying the key issues that need to be shared, blended and understood by the two parties.
Sometimes, a third-party consultant may be engaged for help in achieving this objective.

Effective communication. It is of utmost important for the headquarters to ensure that really effective communication is put in place. This is very helpful for both the parent company and the overseas subsidiary, in order to have a clear direction and to understand the expectations from both parties.
A dedicated team of specialists should be set up to handle official communication in several forms, such as policy and procedure announcements, management visits, and conference meetings.

Regular visits by headquarters representatives. This is important for understanding and to ensure a smooth transition period, and regular visits by responsible persons from different functions at headquarters should be organised. The visits can be made on a monthly or quarterly basis.
The key functions include human resources, finance, marketing and engineering.

Effective change management. It is inevitable to introduce some changes over time, to ensure alignment of the operations in different countries. As resistance always occurs, it is important for the responsible people to be well prepared to manage such changes successfully.
A detailed action plan together with on-site communication must be established, so that the buy-in of such changes can be achieved.

As the trend for companies in Thailand to invest overseas is increasing, it is even more important for the management of these businesses to ensure success in the long term.
As the cost of each overseas |investment is initially high, subsequent investment may be needed in terms |of an established management |system.
Once the headquarters has a good international management system, the chances for the company to explore new opportunities in other countries with greater confidence can be higher as well. The challenge of dealing with people under a different national corporate-culture background should not be underestimated. It is not right to presume that Asian people can be managed in similar ways across all countries in the region.
A company needs to make sure it prepares properly to manage the business in a different location with a different tradition and culture, in order to ensure long-term sustainability.

Dr Yanyong Thammatucharee is head of international finance and operations at Central Marketing Group. He can be reached at [email protected].