Globalization has changed the way world do the business. Although border lines have gone strong but distances have been reduced. Globalization gives a chance to import at lower cost whether material or manpower, which also resulted in outsourcing the work to other country without moving the resources
India is coming up as major decision maker for an organization for its South-east Asia policy, soon swiping the existing position from China or Singapore due to its multi-cultural advantage. It’s now imperative for Indian organizations to recognize the market opportunities in South-east Asia and expand their footprints
Setting up the real estate in a new geography, comes up with lot of challenges. One of the initial and foremost is the Real estate setup
Based on the recent experience of setting up new offices for the organization in new geographies, below are five major challenges faced
1. Language – Even within same country, people may speak different languages, but this is very likely when people from different countries are involved. As such there may not be a common language spoken fluently by team members, in addition, countries may operate in different time zones causing little or no overlap in business hours. So it very important to plan the communication strategy amongst the team members, scheduling the pre-defined time slots for progress discussions, various channels for communication for quick responses
2. Work culture – there may be a chance that people on the other side may have different approach towards their work priorities, you might find them either bit laid back or more aggressive towards their work. The other factors where you can feel the difference is in the way others respond to your priorities. People may stick to their way of work or might go one step ahead to help you to achieve a target.
3. Work Methodology. Right from the terms and conditions in the property lease documents, payment terms till close out of the project their might no. of instances where you face a challenge to come to an agreement between 2 parties due to their general work practices followed in the local country. Work methodology for a construction activity, technical specifications for material used, could be widely different as followed in two countries which might result in different scope of works carried out by party. It’s always advisable to give special attention during detailing of an activity and in case of any disagreements honor the prevailing methodology in the local country.
4. Finding the right partners from builders to vendors. Search for the right city, Location and Building could be most cumbersome job as a start in a new country. Availability of Human resource, Ease of transport, rentals are the most common factors involved in real estate search. Once done with that, right team to setup the office is next big challenge. Top 10 architect or vendors could not be best search for your requirement. To have the right mix of teams would need a proper research and feedback from sources. This may consume good amount of time during planning stage but enhance the chances of project success
5. Assumptions- Pre- assumptions can be very dangerous in a multi geographical projects. it might happen that you find enough workers for construction during any religious occasions, but the same not holds true for every location, some might have very serious issue of non-availability of workers during holiday period. PM must consider this period as Marely any progressive time in their project schedule so to avoid any last-minute surprises. Also, the availability of any material in a specified time could be another challenge which PM shall not assume based on his prior experience in any other country. Not every country has own production, or easy availability of all materials used on any kind of construction. Non- availability of any specific material can put the project in jeopardy. PM shall take all required measures and checks to ensure the adherence to material delivery schedule
Apart from these points, Local laws and regulations change for each country or might be dissimilar even for provinces in the same country. It is very important to have legal advice and validations on any kind of agreement companies go with other parties. Saving Changes...
Mohit, globalization is perhaps the biggest factor in the changing way we do business moving into the future.
A blurb from my 2017 dissertation briefly touched on this phenomenon:
"Globalisation is defined as the "increased interdependence (economic, social, political) between nations" (Northouse, 2013, p.383). Organisations are increasingly immersed in global complexities, competing for resources and information, with dissipating national boundaries (Schermerhorn et al., 2002, p.207). They now can compete globally with decreasing barriers to transportation, currency, communication and cultural factors (Morgan, 2014, p.16), and tap into a pool of globally diverse, quality candidates (Lee, 2014, p.95). Indeed, the enhanced communication, collaboration and connectivity that support flexible work arrangements will attract and retain top-level employees according to 47.6% of C-suite leaders in a recent survey (Deloitte, 2016, p.7). Globalisation is transforming employment practices (ie. flexible work arrangements) and the way organisations are managing these new and diverse resources (Bertone and Leahy, 2002, p.1). All of these factors make globalisation one of the most pervasive influences on the changing nature of business, society and individuals (Kanter, 1995, cited in Spector, 2016, p.193)." Saving Changes...
Really appreciate your views Mr Vergini. Have you done any study also on effects of globalization on real estate industry. Compared to other industries like IT, HR etc, i dont see much transformations happening in Real estate, construction industry. Specially in countries like India, still the same methodology, materials, cost, manpower, skills being used whereas on other side industries like IT and HR, globalization has really transforming the technologies
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1 reply by Sante Delle-Vergini, PhD
Mar 13, 2018 9:00 AM
Sante Delle-Vergini, PhD
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Not in real estate, but there has been some engaging blog discussions on this site about the real estate and construction industry. My interest with globalization and many other factors was with regard to flexible (remote) working solutions on employees intent to stay longer with the company.
Really appreciate your views Mr Vergini. Have you done any study also on effects of globalization on real estate industry. Compared to other industries like IT, HR etc, i dont see much transformations happening in Real estate, construction industry. Specially in countries like India, still the same methodology, materials, cost, manpower, skills being used whereas on other side industries like IT and HR, globalization has really transforming the technologies
Not in real estate, but there has been some engaging blog discussions on this site about the real estate and construction industry. My interest with globalization and many other factors was with regard to flexible (remote) working solutions on employees intent to stay longer with the company. Saving Changes...
I have been a regular visitor to the ASEAN region over the past few years. One crippling factor that needs to be accounted for are the mobility issues and the availability of work permits.
Or rather, the quick availability of work permits. The process to procure one is sometimes longer than the duration of the project itself - which deems the whole approach unviable.
(Note: Project work cannot legally be conducted on Business or Commercial Visitor visas.) Saving Changes...
MARK A ANNUNZIATA, SrVP/EXPERT CONSULTANCY TO THE CONSTRUCTION INDUSTRY| ROMAN STRUCTURES, INC WELLINGTON FLDammam, Eastern Province, Saudi Arabia
All-
I am fascinated by the dialog.
From my perspective, I do not see the above referenced concerns as major in scope for the Construction Industry.
Language, while we respect the various cultural and language differences, the UNIVERSAL language of business throughout the Region of North Africa/Eurasia is English. All the Contracts and Subcontracts are written in English, probably due to the fact that the Pioneering Engineers in the Region were originally from the Us and the UK.
The local Process and Procedures are ISO based and resemble the requirements created by the US Army Corps of Engineers.
The Work Culture and Methodology is similar all over the region due to the influx of non-skilled workers from third world countries. The Progress of Construction Projects is a predictable ,33 SPI.
While I have my private opinions on the Governance challenges between the various Cultures, and the Challenges to the PM's commitment to Ethical Behavior Local to the Region, I cannot say that these do not present themselves in the USA.
I can state that Permitting is NOT the major challenge, except in the case of intergovernmental rivalries.
My opinion from the (Sand) trenches!
M Saving Changes...
Appreciate your comments Mark. Language challenge, off course varies from region to region. If you doing a project in South East Asia, China etc English is not very common there.
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1 reply by Muthukrishnan Ramakrishnan
Mar 22, 2018 9:35 AM
Muthukrishnan Ramakrishnan
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I do face this issue. Executing projects where English is not common
Appreciate your comments Mark. Language challenge, off course varies from region to region. If you doing a project in South East Asia, China etc English is not very common there.
I do face this issue. Executing projects where English is not common Saving Changes...
Nice Mohit. Adding few supporting information to this discussion
Also, we face issues with local religious holidays which is frequent. Even though, our plans are made in prior, things don't get settled due to the holidays which is declared/ changed by government lately. And, I am not familiar with the society here which makes it difficult for me. During weekends, all the works moves to next week and it goes on and on even though one day in weekend is working. Planning and executing of the project depends on respective country laws. Thanks Saving Changes...
