Almost a third of UK domestic businesses are considering international expansion in the next three years. Nita Nambiar, Chief People Officer at Hexaware Technologies, highlights three steps that can help avoid cultural clashes and ensure a smooth transition into a new region: completing thorough regional assessments ahead of developing integration strategies, hiring those who understand the local culture and providing resources to employees for continual cultural education.
As markets mature and digital advancements shrink geographical barriers, businesses are expanding internationally, hoping to unlock new customer bases, diversify revenue streams and stay competitive in a global economy. In fact, a recent survey shows that almost a third (28%) of UK domestic businesses are considering international expansion in the next three years.
But expanding into international markets is no small task, and without a clear understanding of cultural differences in certain geographical regions, companies risk making mistakes. A strong product alone doesn’t guarantee success; overlooking local workplace norms can lead to employee disengagement and dissatisfaction, leaving organisations struggling to maintain productivity and retain talent in new markets.
Organisations must try to understand local customs before branching out internationally, allowing them to get ahead of any potential cultural nuances and nonverbal communication barriers. This proactive approach paves the way for stronger relationships, smoother operations and long-term success.
The business case for cultural awareness
The way companies operate varies dramatically across cultures, from organisational structure and communication styles to business etiquette and expectations around work hours. Hierarchical systems, how feedback is delivered and even how meetings are organised can vary widely. For instance, in some regions, employees are expected to be reachable after 6pm, while to others this would be considered out of the question, or even a sign of rudeness. Business etiquette also differs, from bowing in Japan to handshakes in the US.
Understanding countries’ local cultures enables businesses to avoid potential misunderstanding and ensure employees feel their own traditions and viewpoints are valued. For example, in the UAE, employees can benefit from reduced working hours and flexible arrangements to accommodate fasting during Ramadan. In Saudi Arabia, work schedules are often structured around the five daily Islamic prayers, whilst any business practices must adhere to Shariah Law, such as a prohibition on alcohol. Beyond meeting legal obligations, respecting these local customs also strengthens employee engagement, which in turn accelerates international expansion efforts.
If planned effectively, international expansion can be hugely beneficial beyond just the immediate bottom line boost. By understanding more about how different workplaces operate, organisations can increase their knowledge base, garnering unique approaches to solving problems, improving decision-making and boosting employee and customer engagement. With this deeper cultural awareness, companies are better equipped to make informed choices, manage risks and compete effectively in a global market.
Three steps to drive success in global markets
When expanding internationally, businesses need to prepare carefully to make sure they align with local culture. It is crucial they understand the cultural differences between their home country and the region they are looking to expand into. Breaking down the process into actionable steps can make it easier to undertake and less of a daunting task. There are three key steps organisations need to follow:
1. Prepare ahead of time
First of all, organisations need to complete a thorough assessment of the region. Even deciding to open a new office in a city, let alone a new country, can require months or years of background study to determine if it is the right decision. This decision-making process involves talent mapping and carrying out walk-in interviews. Detailed research of the competitive landscape is also required to understand the potential target market and which service lines or technologies best align with the needs of local businesses. Once a company understands who the key players are, what gaps exist and how their offering stands out, it can focus on improving employees’ understanding of cultural nuances.
2. Prioritise diversity in hiring
When hiring employees to work in new geographical regions, it’s important for leaders to not only prioritise skillsets but also to make sure those with local knowledge have a seat at the table. Including local people, from senior positions down to local leadership teams, can ease transitions to new markets, allowing these employees to share their knowledge downstream and across teams. Alongside these new hires, businesses taking a longer-term view can create technical and soft skills in local hires. To drive long-term innovation, businesses can collaborate with schools and universities on STEM (Science, Technology, Engineering and Mathematics) programmes, helping to shape the emerging talent pipeline. It’s not about the volume of hires from these initiatives but rather ensuring that team members understand local culture, align with business goals and are capable of advancing success in the new region.
3. Foster employee independent learning
For a global company, with employees spread out across the globe and interacting with customers from various countries, it can be difficult for network and training groups to really make a difference. To make a significant impact, employees need to be empowered to take ownership of their cultural learning. Companies should facilitate this by offering access to hands-on learning experiences and pointing employees towards third-party resources that provide further information. By offering staff the right tools, knowledge and networks, companies can empower them to understand and navigate cultural differences proactively, enabling them to respond appropriately in any situation.
Shaping a culture without borders
In today’s increasingly interconnected world, organisations must make a deliberate effort to incorporate diversity at every level, particularly when expanding internationally. Achieving global success means not only committing to diversity initiatives but also following them through. They need a global mentality embedded into core operations, culture and decision-making processes.
As new generations enter the workplace, the lines between different cultures continue to blur. Now, more than ever, employees can pick up nuances from one another, learn to collaborate better and adapt even faster. Businesses should capitalise on this shift, and by using these three steps as a starting point, they can begin their journey towards international expansion. Culture will only continue to shift, so businesses should ensure their internal culture is malleable and can embrace societal changes in existing markets and new international territories. Businesses that fail to develop cultural understanding will fall behind those that can, impeding their ability to foster trust and long-term success in diverse markets.