What Do You Understand By Organizational Capacity?

Any overseas marketing effort will always be more complex than operating in your home market. It will require a serious commitment of time and effort and could stretch organizational capacity to the limit.

Effective communication will be critical to global marketing success. Communication with customers must be effective linguistically and culturally. In order to drive such contact successfully, internal teams must communicate well, often across languages and cultures. As a global competitor, you will have to be highly responsive to inquiries, so that prospective customers are not lost because of lack of diligence.

Cultural and linguistic dissimilarities between employees of different countries can be a source of inspiration and learning, as well as possible friction and miscues. Flexibility, tolerance, and acceptance become particularly important. Management approaches that are effective in a home market may be ineffective elsewhere, and hiring practices, compensation, hours, holidays, and benefits may be radically different.

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In addition to human-capital stresses, financial-capital issues abound. Of particular concern is the financial impact of currency fluctuations and the company’s capacity to manage them. Another set of concerns centers on the movement of funds out of foreign countries, and maintaining adequate cash flows. Organizational capacity may be strained because of financial requirements and constraints.

All areas of a small company will be tested by global expansion, so that the marketing, accounting, operations, and legal spheres are also affected. The marketing aspects—research and analysis, market adaptation, product modification, pricing, distribution channels, and promotion—will all demand attention. International accounting standards and practices vary widely, with any foreign operation needing to comply and integrate with that country’s standards and practices. Even for businesses that export or import, addressing currency conversion can be problematic. Operating issues include the ability to understand and interpret international rules and regulations and to successfully implement production and distribution. Finally, global marketing exponentially increases the legal issues facing the business, including customs, tariffs, and taxes domestically, and intellectual property, local laws and regulations, and trade barriers abroad.

Global marketing may test the limits of any entrepreneurial venture. However, entrepreneurs need not go it alone. There are numerous free and fee-based services to supplement their internal capacity. For many, going global can be a key to success. The London School of Business and Finance is the one-stop solution to learn more about global marketing.

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