Six Common Challenges In Managing A Global Organization

As a big baseball fan (Go Red Sox!), one of the most fascinating aspects of the sport is how international it has become. Across Major League Baseball, more than a quarter of the players on big-league rosters were born outside the United States and this percentage is increasing.

Baseball, the most American of institutions, went global to find new talent, expand its brand and introduce its business to new customers. Its international success should serve as a lesson to any enterprise, old or young. If your business is looking for growth, going global is the natural next step.

There will be roadblocks. I should know. At one time, I was vice president of international finance for an American supplier of telecommunications networking equipment, where I was responsible for the accounting, tax and finance functions for 30 foreign subsidiaries. In addition, I spent considerable time helping support their HR and legal needs. I have the battle scars to prove that managing a global organization presents challenges.

Although individual companies respond differently to international opportunities, my experience finds that they face a common set of challenges when managing a global footprint.

1. HR: People are an asset and a challenge. Many companies find recruiting and developing talent abroad hard to accomplish. There are language and cultural differences to overcome, and you often don't have HR personnel on the ground in satellite offices. Identifying an onboarding program for international employees that works for you is a critical success factor.

   At-will employment, which allows businesses to terminate workers for any reason, is a U.S. construct. Outside the U.S., employment relations are handled by contracts, and host country labor laws may supersede certain elements of what we, in the U.S., think of as a typical employment agreement. Penalties for noncompliance can be significant. In France, for example, the maximum damages for unfair termination is set at 20 months of gross salary for employees with at least 30 years of service. Companies with global workforces often deal with multiple payroll and HR administration systems too. No wonder HR leaders struggle to find the time to be strategic.

2. Taxes: Complexity is increasing. The list of countries initiating a value-added tax, which is collected at each stage of production, in growing, most recently in the United Arab Emirates and other Gulf states. As more sales go online and are fulfilled by...