Initiating and managing business in the other countries OR even in your country in mlm industry has its share of challenges as compared to the other turf.

While the business processes are well run in the home country, the companies find the same processes perform unsatisfactorily or at least sub-optimally in their overseas entities.

This is mostly a result of replicating business models, organizational structure, processes and practices in different countries without full appreciation of the fact that businesses have to be organized and their risks managed differently, in foreign land.

There are various underlying factors and therefore the governance of business has to be customized to local situations.

The top reasons for why and how companies face some typical business risks in India:

Local regulatory

In India, the regulatory is generally mentioned to be complicated. Besides, the environment is perceived to be somewhat lacking in terms of speed and transparency, though it is changing for the better.

This is in contrast to the situation of most of the companies in their home countries.

The companies coming to India face a heightened risk due to insufficient supervision over local regulatory compliance besides other risks such as Foreign Practices Act of USA and Code of business violations.

Market Behavior

Consumers, distributors, channel partners behave differently in different parts of the world, and India is no exception. The local behavioral pattern, commercial practices, expectations, traditions, culture and ethical standards in India are much different than in other parts of the globe. This throws up the risk that a company’s business rules, policies and processes that may have been working successfully elsewhere may be quite misaligned to the local needs in India.

Long distance and in adequate knowledge of the country leads to the company depending too much on local top management in India. This coupled with inadequate direct communication with the country’s local staff tends to increase the risk of power abuse and control failure.

Another risk that the companies face in India is that of disruption in strategy implementation and operational control due to higher attrition even at senior levels, since India is a fast growing economy and offers lucrative job opportunities.

Work environment

With its cultural difference from other parts of the world, India’s  work environment is different , and expectedly so. The difference in employees’ expectations from the job, societal pressures and stress level leads to the existence of a different set of drivers for their motivation and engagement, giving rise to a set of challenges in the human resource management that is different from those in the other countries.

Companies that replicate their global HR practices without adequate alignment with local work environment and employee mentality, often struggle with sub-optimal employee engagement and thus lower performance which gives rise to consumer satisfaction risks.

Size of the business

Very often, the relatively smaller contribution of an Indian entity start up to the global revenue and/ or the bottom line of the company, takes its toll on the attention that its governance deserves.

While, executive attention is mostly focused on the market share, technology, revenue and the cost targets, there is generally less than required allocation of budget for governance, risk and compliance review.

We make sure that these challenges are overcome by customizing the governance framework to suit our country’s situation ,by analyzing the business operations in the right context, keeping relevant benchmarks, making sure that the internal control design and review mechanism are appropriate as well as adequate along with regulatory compliance mechanism being comprehensive . Along with it the people policies and practices are customized, communication made direct and clear.