Sanctions of Being Unprepared When Doing Business in Asia & Its Solutions

April 6, 20204:11 pm596 views
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In the global competition, businesses should spread their wings in order to thrive. But being a multinational corporation does always come with a harder challenge, such as partnering with cross-culture business and adapting to new local jurisdictions, law, and legislation. This, obviously, would need a big effort to understand, especially if the company operates in a country with special laws. 

For example, Malaysia and Saudi Arabia adopt Shariah law, a law focusing on the obligations and permission for Muslims coworkers to do their mandatory practices and to avoid any unethical behaviour against Muslim coworkers. Another instance, Lese Majeste Laws in Thailand is an act that forbids individuals from insulting the monarchy. Japan and China are also known for its strict and polite cultural standard

See also: How Japanese Work Culture is Different From the Rest of the World

The sanction of violating the law 

As Asia is a place of diverse laws and regulations, business that want to expand to Asia regions should be careful with some business sanctions. Violating cultural and commercial law in the Asia region could do more harm. In fact, violating business laws has always been associated with negative results. 

Former Nissan CEO Carlos Ghosn is a famous example of how seeking problems with Asia laws can hamper the business. Ghosn was a successful executive, reviving French automaker Renault and Japan’s Nissan. Due to his brilliant achievements, Nissan company assigned Ghosn to build an alliance between two other companies, including Japanese carmaker, Mitsubishi Motors. However, Ghosn was not completely ready with this assignment and faced financial misconduct charges. Then, Ghosn was arrested in 2018 and held in custody while the courts repeatedly denied his bail. On March 6, 2019, he was granted a US$9 million bail but the businessman subsequently fled from Japan in December and landed in Beirut, Lebanon. 

It can be concluded that Ghosn was not ready to deal with multicultural business. Asian countries are common with its arrest warrant and the hapless executive might have done nothing to warrant arrest and detention. Unless there was a complete readiness for changes and unexpected failure, even executives could be a convenient scapegoat or conman in his own efforts.  

Reassess foreign expansion 

Ghosn case can be an example for multinational companies to reassess and ensure they have taken appropriate steps to protect and prepare their executives as much as possible before joining the multinational cultures. In this regard, here are four important points to highlight:

  • Select and train the right executives 

Training should be thoughtful and tailored as far as possible to the role of senior executives, company, and the jurisdiction that the executive is relocating to. It should reflect the size and set-up of a local office, the industry the company is in, especially if the industry is heavily regulated. For example, Katheryn Graonauer, founder of executive training company Thrive Tokyo, said that executives moving to Japan should have some survival Japanese skills under their belts, which might look something like a three-month language immersion with weekly sessions. 

  • Briefing before arrival 

Briefing and expanding your executives’ knowledge about the targeted communities is critical. A briefing can help your executives understand what to expect during the moving process. The briefing also ensures that managers are fully prepared and don’t have any unexpected challenges. 

What to discuss in your briefing? Emerico De Guzman, a managing partner at ACCRA Law, advised HR team to give knowledge of these aspects during the briefing with the C-suites: local culture and customs/practices, local laws and employment, applicable corporate governance rules, immigration and human relations laws and regulations, and some basic criminal laws and procedures. 

  • Language ability 

Business translators would be helpful when working in a foreign environment. Business translators can help executives avoid legal complexities of costly blunders during foreign assignments. However, even when you have a business interpreter, there might be critical stages of negotiations where your interpreter himself could not deliver the message well. 

In this stage, William Requejo in his book Global Negotiation: The New Rules advised that interpreters should not be the sole focus of every foreign business negotiation. The assigned manager himself, should at least be able to speak local or English as their second language. English is, said Requejo, the international language of business and technology. 

  • Make sure all the documents and permits are in place 

Last and probably the most important parts of all, ensure that your managers already hold employment permits and work visas before assuming their duties and signing official documents. 

Read also: Meeting Etiquette across Asian Countries You Should Know