Going global is an art. And to do it you need innovation (not just in products or processes, but mindset too), an entrepreneurial spirit and the right decision-making tools to move beyond your local arena and establish yourself abroad. The art of Going Global. A Practical Guide to a Firm’s International Growth by Olga E. Annushkina and Alberto Regazzo is a compass that will help you find your direction in the complex and increasingly competitive global market. The book, published by Palgrave Macmillan, is a concise, constructive guide for managers and entrepreneurs who are ready to globalize their business. The aim is to help them in their decision-making routines without the false pretext of revealing any special “secrets to success.” In addition to advice on how to set up your internationalization project, the book offers ideas on how to create and adapt every strategy, even in the face of uncertainty, how to organize your office and get people engaged in the decision-making process, and how to choose the most attractive markets for your products and services.
We reached out to the authors and asked them to tell us more about their latest book.
Is it appropriate to talk about globalization today, in a context of enormous uncertainty brought about by the Covid-19 pandemic?
In 2020, the pandemic has forced countries to close their borders, stopping or slowing international flows of all kinds. But after this slowdown, we expect the globalization trend to continue, albeit with a different configuration than before. This “new globalization” will be strongly shaped by local and international legislation that will establish new rules covering everything from technological security to local economic incentives. All this could potentially trigger serious imbalances in various sectors. In this kind of environment, managerial decisions are more and more driven by concerns about public health and safety, with reflections on risks factored into every decision, for both people and companies alike. The desire to reduce risk and the complexity of business networks could lead to reshoring operations and regionalizing international flows.
Competitive arenas will become more complex, companies with greater resources will have an edge over weaker ones, with the risk that oligopolistic market structures will arise. Companies and entrepreneurs that work in the industries hardest hit by the pandemic will look for innovative solutions, and the decisions they make will intensify domestic competition.
To grow a business, internationalization will continue to be one of the major levers, often a spontaneous one.
Don’t you think that it’s still risky to expose your company to global events?
During this pandemic it’s risky to do business on the domestic market too. For companies that work locally or internationally, the key is carefully managing cash flows. The markets will emerge from the pandemic by making very different economic comebacks at very different speeds. Staying ahead of your competitors when the recovery starts is crucial to reap the rewards.
In the introduction, the book is referred to as a “tool,” but in the subtitle it’s called a “practical guide.” In what way is your book a useful tool for companies that want to go global?
Our book helps managers and entrepreneurs to establish and implement internationalization strategy. We suggest breaking down this strategy into eight decisional areas: setting company targets, raising awareness of the company mentality for international growth, facing the adaptation/standardization dilemma, prioritizing foreign markets, identifying entry modes for foreign markets (using contracts vs investment capital), becoming aware of prejudice that can influence the formulation of an internationalization strategy, determining the organizational structure and personnel. For each of these areas, we propose different strategic options to think about, and we discuss the factors to consider in applying these factors, specific to each specific type of company. The book doesn’t offer recipes or reassuring best practices to study and imitate, because we are totally convinced that a sustainable strategy for success is contingent on a company’s uniqueness.
In the book you also talk about the barriers to internationalization for Italian companies. What are the main limitations in this sense, and how can companies overcome them?
In the text, we first list all the advantages that Italian companies enjoy on global markets: entrepreneurial expertise, even in medium-large sized companies; a solid reputation in many industries; the capacity of Italian managers and entrepreneurs to work in multicultural contexts; experience and the ability to build business networks. Keeping these competitive advantages in mind and beginning with the eight decision-making areas, we address the potential obstacles to growth one by one. Let’s take the example of setting targets. Companies that don’t set targets to hit in one, two, or three years will never make a decision on positioning resources in growth areas. This defeatist attitude is their downfall: “We’ll be lucky if next year is more or less like this one.” Formalizing the decision to grow internationally is the first step to take. What’s more, when companies don’t adapt their products and services to unique cultural, economic, technological and digital characteristics of target countries, they lose many growth opportunities. If you’re channeling your efforts into a certain target country following a “let’s go where they call us” approach, you’re not analyzing whether or not your corporate, human, and financial resources are really suited to that context.
One chapter is dedicated to empathy and ethical aspects of adopting to global markets. Why are these two elements so important?
In building relationships with customers, partners, and international suppliers, three elements are indispensable: knowledge of external markets, curiosity and willingness to learn and take risks, and the ability to build trust. In the second chapter of the book, we talk about personal empathy and organizational empathy, both necessary to start (or restart) the process of internationalization. More importantly, empathy helps avoid one of the typical problems that companies face on foreign markets: path dependency – that is, the tendency to replicate business models that have success on the domestic market in an international context too, without considering unique features of local markets or the need for adaptation.
We intentionally talked about ethics at the beginning of our book, a topic that’s normally put at the end of corporate strategy manuals, with a guilt-ridden “last but not least.” We’re convinced that by defining and implementing values and corporate rules, with top management setting a good example too, companies can anticipate possible ethical problems that could emerge during the process of internationalization. By applying values and ethical principles, companies can protect their reputations and create a system of human resource management that is fair, and has the potential to attract talent. To inspire our readers, we also talk about “managerial artisanship,” an attitude that does not allow manipulation or cynicism directed at customers, and enables companies to activate and mobilize their talent, especially in tough times.
For participants of large listed companies to enrich their knowledge with elements, both intrinsic and unfolding, to further develop their governance and leadership skills.