When doing business abroad, identify and plan for regulatory challenges. Part five of a six-part series.
In global operations, we tend to focus on the soft aspects of challenges, such as cross-cultural differences. In recent times, however, the more explicit regulatory frameworks are presenting a much greater challenge to New Zealand organisations doing business abroad.
Three major factors seem to be contributing to this. The first is the challenge of comparing regulations. To that end, some widely known indicators of regulation have been created. For example, the World Bank produces a large set of indicators on the ease of doing business in 189 economies. Similarly, the International Monetary Fund produces all sorts of documentation relating to regulations.
Yet, despite the abundance of indicators, it is hard for businesses to use the standalone figures, as the picture might change depending on their choice of indicators (although broadly, we expect developed economies to be more open than developing ones).
The second factor is the difference between the regulatory frameworks of two countries.