Beyond Asia: strategies to support the quest for growth
Recommendations for globally focused companies
Global companies with more mature risk management frameworks can outperform their peers.
Put in place robust risk management.
A more diverse international footprint and the need for greater autonomy at the local level emphasize the business case for a robust risk management framework. This should enable innovation and autonomy at a local level but do so within a set of parameters and rules that uphold the company's values.
A robust risk system will provide early warning of problems on the periphery of the organization, giving managers better information and more time to respond. Companies can also harness risk for business advantage and turned into tangible financial results.
Our research has shown that companies with more mature risk management frameworks can outperform their peers financially.
Make the transition from investment to profitability
For many globally focused Asian companies, the priority remains investment and growth. This means that profitability is not always top of the priority list. However, as these investments mature, they will need to do more to introduce efficiency and increase productivity. This will require:
- Focus on process
- Consideration of derived economies of scale
- Detailed tax planning
Take steps to make the corporate culture more international
To succeed in global markets, companies need a corporate culture that reflects the diversity of their customer base and operations. Companies can disseminate best practice and create a more international workforce by:
- Recruiting managers with experience of different markets
- Reducing reliance on expatriate workers
- Creating global talent management programs that enable the flow of talent
Choose which functions should be global or local
Autonomy for local managers helps to ensure that products and services are relevant to the local customer base, but not everything needs to be decentralized. Companies need to think about where they can derive economies of scale without compromising local relevance. Functions such as finance and IT are often good candidates for centralization.
It is also possible to create platforms for locally delivered services. For example, a company may create a centralized marketing function that provides capabilities to local markets, but allow the local markets to interpret and apply these capabilities in their own way.