Subsidiary Management OR The Art of Operating Cross-Border Expansion Actively
"Subsidiaries are a common feature of business life, and all multinational corporations organize their operations in this way."
Drucker, Peter F. (1997). The Global Economy and the Nation State. Council on Foreign Relations. p. 172
The water to the next stage of possibilities is likely to be troubled and the weather conditions might also not be as comfortable as we hope. No matter whether it’s calm or stormy, dry or wet, hot or icy, nearby or far away - speed matters if you want to make business in a new country, and you may get in charge of things you have never done before. We’d like to make it easy for you by providing a rough overview of
What to expect ?
Regardless of any target you want to achieve, or any system or process you want to enable - there are some repeating constraints to keep in mind if it comes to opening, moving, and closing subsidiaries in another country and you probably get confronted with questions like those :
|
Legal Entity |
Do you need a legal entity ? Do you want a legal entity ? What type of legal entity ? |
|
Positions |
Do you need a CEO ? Does a Country Manager suffice ? |
|
Responsibilities |
What are the legal requirements in each country ? What are the corporate needs ? Do you need any accreditation / authorization to operate ? |
|
Manufacturing |
Do you need production facilities in a particular country to be allowed to run any business over there ? |
|
Interfaces |
Where are those at e.g. Operations, Finance / Accounting, Business Development (BD), Human Resources (HR), or Quality Assurance (QA) ? |
|
Decision Level |
What will be the limitations for cost approvals or financial decisions ? |
|
Local Market |
Who will be in charge of BD, Clients, Contracts ? |
…impacted by constraints concerning
- Personnel (qualification, availability of workforce)
- Legal
- Work Environment
- Communication & IT
- General
- Subfields in case of consultancies
Sometimes, results can be subtle, particularly at first. Often there are simple, basic things that need to take place before you see bigger shifts in your journey. But where to start ?
Carve your course by focusing on what matters and find your
Starting Point (expand as you need)
Here are 2 lists - with only a minor differentiator - that you can use for that purpose :
1. If you open a new entity watch out for
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Category |
Topics |
Concerned Area |
|
legal requirements through laws & regulations that are enforced by national authorities |
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international legalization and recognition of documents (i.e. judicial and notarial documents or industry-specific guidance) |
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country specific/regional management & market expertise |
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local infrastructure
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2. If you purchase an existing business
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Category |
Topics |
Concerned Area |
|
recommendation |
clean up potentially existing issues |
anyone at management |
|
legal requirements through laws & regulations that are enforced by national authorities |
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internationally recognized and legalized documents (i.e. judicial and notarial documents or industry-specific guidance) |
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country specific/regional expertise |
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local infrastructure
|
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All in all
What may sound overwhelming is not that bad at all as your duty is to
- gather disparate pieces of information
- process them as a group
- evaluate options
- and decide
Collectively you will almost always make better decisions than anyone could make on one’s own.
Hope it helps!
Any thoughts or comments or questions on that ? Any experience you’d like to share ? Send us Your thoughts and questions by sending us an eMail. Thank you and
Happy Sailing
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