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  December 12th, 2015 | Written by

Finding New Employees Who Support Company Culture a Top Concern For Businesses Expanding Abroad

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  • Sourcing new employees who support a brand’s existing culture is a top concern in business expansions.
  • The desire to open new markets and gain share as the main drivers for corporate expansions abroad.
  • Levels of taxation or skills shortages are often overplayed as concerns to companies expanding overseas.

A new report released by The Economist Intelligence Unit (EIU) states that bringing new people into a company’s culture and values is among the biggest challenges during international expansions.

The report, “Corporate overseas expansion: Opportunities and barriers,” sponsored by TMF Group, builds on a survey of 155 senior executives who have knowledge of the issues involved in their company’s expansion into foreign markets.

Among those interviewed for the report there was near-unanimous agreement that maintaining company culture while respecting local customs and cultural differences is a fundamental objective for a successful international expansion. By contrast, policymakers may have overstated the importance of a location’s level of taxation, as this seems to be far less of a concern in companies’ expansion projects than might have been expected.

The survey also finds that a desire to open new markets and gain market share are the principal drivers of corporate expansions abroad, selected by 59 percent and 57 percent of respondents respectively. This is especially the case for European countries, where sluggish growth in domestic markets has encouraged many European companies to seek stronger returns overseas. By contrast, the majority of respondents in Asia-Pacific are particularly driven by the need to find new sources of capital.

“It’s clear from our report that once a company’s executive team has identified its scope for an overseas expansion, much of the success will rest on comprehensive planning,” said Martin Koehring, the report’s editor. “This includes softer brand-authenticity elements, such as maintaining the company culture and values, that are in some regards more pressing—or perhaps more challenging to master—than harder aspects such as currency hedging, integrating operational systems, and ensuring compliance with local regulations.”

Among other report findings, half of survey respondents, especially North American respondents, seek support from governments and chambers of commerce when expanding abroad. It is not unusual to find big-brand companies with no export experience at the board or executive levels, experts say, which is likely to be one factor for a reliance on support from trade organizations such as chambers of commerce.