International Business Partnerships: Why They’re Critical

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Do you have any business partnerships abroad? Why might you need them?

In Hit Refresh, Microsoft CEO Satya Nadella discusses the importance of international business partnerships. Drawing on his own experience, he shares two ways you can benefit from such ventures.

Continue reading to learn the advantages of global partnerships.

Building Strong Partnerships Abroad

Nadella stresses that it’s important to seek partnerships abroad. He says that such partnerships bring two benefits:

Benefit #1: Fostering Economic and Technological Development Abroad

Nadella notes that a country’s economic success is often heavily dependent upon how quickly and effectively they adopt new technologies into their industries. In creating local partnerships in countries throughout the world, Nadella claims that Microsoft is helping to stimulate the economies of developing nations, which in turn raises the overall standard of living and creates more employment opportunities for the citizens of each place.

Benefit #2: Getting Closer to Your Customer Base

Nadella warns that, just as CEOs can become too isolated from the rest of a company’s employees, so too can a company as a whole become too isolated from the real-world circumstances of parts of its client base. Nadella gives the example of choosing to do the launch of Windows 10 in Kenya instead of in a more glitzy, Silicon Valley-based location. While some people found his decision puzzling, Nadella argues that the product launch allowed him to better understand Microsoft’s impact and potential for its customers in the developing world. 

(Shortform note: Nadella stresses the importance of building partnerships abroad, but a former Microsoft employee claimed that the company’s practices aren’t all legitimate. In early 2022, Yasser Elabd alleged that the company spent more than $200 million a year on bribes and kickbacks in countries like Ghana, Zimbabwe, and Saudi Arabia. He added that it was going on at “all levels” and that executives were aware of it. In response, Microsoft said that they believed the allegations were many years old and that they had already been investigated.)

Forming a Beneficial Business Partnership

Building business partnerships abroad can be beneficial, as Nadella says, but consider these tips before entering into a partnership:

Look for a shared vision. Ensure that you and your business partner have similar goals and values to confirm that you’re both working toward the same thing.

Clearly define each partner’s role. Leave nothing up to chance: Openly discuss who will do what within the partnership, and set your boundaries accordingly.

Be blunt about money. Set out each party’s expectations regarding finances and how they will be managed. Outline your strategies for dealing with investment, debt, profits, and so on.

Set your legal status. Agree upon what sort of partnership both parties feel comfortable with, and figure out what steps you need to take to make it official.

Draw up an exit plan. Before entering a partnership, have a frank discussion about how either party could withdraw from the partnership if things change later on.

Hire legal counsel. Turn to a qualified lawyer to provide all the advice and documentation you may need—never take a DIY approach to such business matters.  
International Business Partnerships: Why They’re Critical

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Elizabeth Whitworth

Elizabeth has a lifelong love of books. She devours nonfiction, especially in the areas of history, theology, and philosophy. A switch to audiobooks has kindled her enjoyment of well-narrated fiction, particularly Victorian and early 20th-century works. She appreciates idea-driven books—and a classic murder mystery now and then. Elizabeth has a blog and is writing a book about the beginning and the end of suffering.

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