Articles From the Team

Understanding local cultures and business methods when recruiting

A great deal of care must be given when a company wants to bring its presence to a new market, whether it is a national or an international expansion.

When Tesco entered China, it had huge ambitions, of ‘carpeting the country in expansive malls and supermarkets’. First, i got itself a local partner ‘China Resources’ but sadly after entering the market, China Resources soon realised that it had ‘underestimated local business’. It had ‘booked a £630m write-down on the value of its remaining investment in the loss-making venture’.

This venture has been documented various times in various press releases. It shows how a major supermarket player in the UK still underestimated the differences between a national and an international market. This is a classic tale of success in one international city, where intelligent and capable business thinkers apply a ‘tunnel vision’ approach in terms of their strategy.

This has been the case not just in the retail world, but we have also witnessed it in the banking, legal and technology sectors and in major law firms. Often times companies and law firms have seriously underestimated local demand, or demonstrated a real lack of understanding of the local market and how businesses operate. Careful research and a real insight into the local market must first be acquired when a new business wants venture into a new market to avoid making the same mistakes.

The good news is, in recent years, it seems there has been a switch from corporate ‘colonisation’ to one of ‘partnership’ in the legal market. Case in point is the recent merger of Morgan Lewis and Stanford Law in Singapore, and of Dentons in London and Decheng in China. This was done so that a ‘global’ offering was truly available to clients without diminishing or belittling the local offering which is vital to retaining local clients.

So what of Tesco? They too entered into a partnership, why did it fail? This can be seen as Tesco not having a sufficient understanding of their presence in a different market. In spite of a big name in the UK, in China Tesco had little or no influence or visibility. To replicate its success and apply its expansion strategy from the UK directly across to China it was doomed to fail. It failed to learn the lesson demonstrated by the U.S. when Walmart purchased ASDA. When Walmart purchased ASDA in the UK, in 1999, ASDA did not change its name to Walmart, but maintained the strong ASDA brand. Walmart brought its unique offering to ASDA which was seen as a strong British brand in the local market. Perhaps if Tesco had done the same, its fate in China might have been different.

Business must have a versatility to evolve and adapt in a constantly changing society. Even the biggest multinational corporation must not neglect the importance of locality. This is also very true for recruitment. Very often, clients in different regions or cities will have slightly different demands and priorities, despite recruiting for a similar position. Some companies emphasize a need for more specialist technical skills whereas others might be prepared to compromise on these and favour a more creative approach and like to see ‘‘entrepreneurial flair’ in their interviewees. This is why when assisting our clients, we always focus on identifying and sourcing the most suitable individual who ‘can do the job’ but as importantly, also fits the corporate culture of that particular business.

When assessing a role profile or candidates’ suitability for a job, we pay particular attention to what is not written on paper, . We will always ask our clients to describe the ‘culture’ of the company they belong to and try to find out more about the of the ‘personality’ fit of the ideal candidate. We ask the same of our candidates

So, forgive the sometimes ‘pertinent’ questions. In essence, we are adding to a corporate family when recruiting a lawyer into a business and to do it successfully we have to understand the culture and the ‘tradition’ of the family, i.e., not just the talks at the table but also the manners at that table.

By Eren Wong, Consultant, In House, BCL Legal. Please contact Eren on 020 3 651 5619 or email erenwong@bcllegal.com