From a rule of law perspective, international business has always presented an obvious quandary. In general, the force of a country’s laws stops at the edge of its borders, whereas the business operations of many companies routinely transcend them. Despite many domestic regulations regarding international operations, in reality, only the United Nations has jurisdiction between and amid nations, and its powers are quite limited. As a business owner, therefore, it’s up to you to educate yourself on how to navigate the globalized market in an ethical fashion. Aston’s online international MBA for Canadians is well-positioned to guide your studies, with a curriculum that responds to the latest developments in business theory and a delivery model that prepares you to operate without borders.
This quick guide will walk you through four basic best practices for staying on the right side of the various laws, cultural divides and moral quandaries you will face when you elect to go global.
1. Bear the law in mind
If you have an office or a factory in a foreign country, it should be obvious that you will have to follow the laws of that country. Make sure you have advisors with expertise in the local legal (tax, labour etc.) system to avoid running into issues. But remember that you will also be held accountable for certain international activities under the laws of where your headquarters are based. Countries like Canada and the US have passed laws defining the responsibilities of international businesses in areas such as accounting, and there are strict laws forbidding overseas activities which would be illegal domestically, such as bribing foreign officials.
2. Use international business standards as your pole star
There are many legal grey areas in international business due to the absence of a strong global governing authority; differences in local laws; and the volley of new questions launched by widespread globalization that legislators have yet to reach consensus on. Recognizing this, there are a variety of voluntary international guidelines businesses can choose to abide by, such as those created by the Organization for Economic Co-operation and Development (OECD).
The OECD guidelines provide a set of standards for labour relations; human rights; ecological accountability; competition; and information transparency. The goal is to recognize that, independent of the profit motive and legal compliance, the dealings of businesses have an ethical dimension which demands they shoulder some responsibility to act humanely.
3. Various tactics, one strategy
You must adapt to the situation on the ground wherever you do business, but it’s also true that without a unified corporate identity and an overarching strategy your organization could become fragmented.
Develop a single strategy that can be broadly applied throughout your network of operations. An employee from an international branch office should be able to walk into your global headquarters and recognize it as their own company. Start with a code of conduct that clearly outlines your principles and expectations with regard to executive conduct, dispute resolution and decision-making responsibilities. From this core, you can allow your local managers to make additions or modifications to accommodate the local business culture and societal mores, ensuring that employees feel comfortable.
4. Prepare your employees to operate internationally
Many of your key staff should already have a good idea of how international business works thanks to their experience and educational background, but there will be specific quirks and challenges unique to your operations. That’s why it’s important to train your international employees to ask the right questions. They should feel empowered to assess the local situation in light of your overall strategy and to work with a head office to make business decisions that respect cultural sensitivities as well as your core values.
If they are clear on what your company is and strives to represent at the corporate level, they should be able to find harmonious ways to adapt to local customs and tendencies. That’s also why it’s important to hire on locals or bring in consultants who can provide the kinds of insights that can only be gleaned from lived experience.