Setting up Abroad

          


The challenge of international expansion comes with compelling growth opportunities for a company seeking to advance and expand, even with an awareness of the risks that such ventures carry. Furthermore, in addition to planning the company’s operations abroad, an international expansion project needs to include plans for learning a new culture, language and lifestyle. 
 
It is highly desirable and recommended to appoint a manager who will move to the location to start up and run the subsidiary. This will make it possible to understand operational details, in terms of both work processes and legal requirements. 
 
The decision to work with a local partner is a crucial one that the entrepreneur will have to make in order to ensure the project’s short- and long-term success. 
 
Another key to success: building and sustaining relationships with every stakeholder who can affect the project. Among other things, this is needed for effective handling of any local issues, because it enables the right measures to be taken at a reasonable cost. 
 
In some cases, local people perceive the new company as a source of wealth and opportunity for themselves and their families. Their cooperation is immediate, and in return they expect either employment or assistance. Ongoing contact with the home embassy is also crucial, as is contact with other expatriates living in the area and who have a solid understanding of local customs and lifestyles. 
 
As foreigners, we look at a situation with fresh eyes, allowing us to identify the growth potential for our products and services, as well the resulting opportunities. In addition, we need strong local partners in order to channel the necessary human and financial efforts for achievement of goals and minimization of risks. In order to succeed, this kind of necessary partnership requires shared corporate and social values. The expatriate manager plays a key role as a representative of the foreign investor. This person is the eyes and ears of the leader back in Canada, and works to ensure smooth operations and the achievement of results, while also maintaining a strong relationship with the partner.
 
The transfer of Canadian expertise and skills to local employees is essential for the survival and growth of a foreign subsidiary. 
It is also necessary for the company to be a good corporate citizen and take on a social role in the host community. 
 
At the same time, expatriate managers and their families will gradually adjust to the local way of life through various activities with locals and fellow expatriates. Without renouncing one’s values, it is still necessary to accept that in the host country, things are done differently, whether in the personal or professional spheres. It is a sign of respect for the culture, and also a way to stack the odds in favour of a successful foreign expansion.

By Gilles Bellemare, Eng., G.D.A.S., consultant with Lafond Gestion. Among other assignments, this former Hydro-Québec CEO managed two of the company’s subsidiaries in Peru.


 

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