2012 – Birchtree Global

Janet Walsh quoted in Atlanta Journal-Consitution, July 8, 2012 on Vacations

By Janet Walsh|2012-07-07T19:55:19-04:00July 7th, 2012|Categories: Birchtree News, Uncategorized|

America a no-vacation nation

Published in the Atlanta Journal-Constitution, July 8, 2012

This spring, during a weeklong vacation in Florida, Caren West wasn’t just wired, she was literally wired…or wireless. The local public relations whiz spent most of her time in a beach house with laptop open, smartphone ringing and brain firing as she dealt with clients. On the one day she planned a boat trip, she asked for a moment of peace — which she got, until she returned to land and her mobile phone blew up.

“It is to the point where it almost doesn’t make sense to go on vacation, because not only are you working, but you come back to twice as much work,” said West, co-owner of Caren West Public Relations. “I always feel guilty about not working.”

West isn’t alone. More than half of American workers ended 2011 with an average of 11 days unused vacation time, according to a recent survey by Harris Interactive for JetBlue. Financial constraints, fear of losing a job and just having too much work to do, are among the reasons workers give for not taking earned time-off.

If they do go on vacation, many workers find it hard to disconnect, keeping their smartphones, computers and other gadgets at the ready. Managers seem to do better at taking time off. According to one survey from CareerBuilder.com, 81 percent of managers took or plan to take vacation this year, compared with 65 percent of full-time employees.

While no one disputes the value of a vacation — research supports the need to avoid burnout and reduce stress — finding the time and the money for a getaway, can be a challenge.

West, a self-confessed workaholic, takes about 10 vacation days per year, but not without extensive preparation.

“Determining when I can take a vacation is tough because we are in a field that changes daily,” she said. “We try to prepare clients by letting them know we have a team of two and four interns.”

Her safety, however, is planning vacations where she knows there is wireless access just in case she needs to put in some office time.

Janet Walsh, president and CEO of Birchtree Global, LLC, said the working vacation has become the norm, particularly as the workforce becomes more global.

“I am seeing a huge trend in people taking their work with them on vacation,” she said. “The boss isn’t going to know if you are sitting on a beach in Cancun emailing a customer in Portugal, and the customer isn’t going to care, either.”

Walsh, who recently moved her business, which provides human resources, tax, legal and financial solutions to companies expanding globally, from Atlanta to Bedford Hills, N.Y., found herself working with a client in India on the Fourth of July.

“They understand it is a holiday, but they are sitting in their offices waiting for us to respond. If we don’t, someone else will,” she said.

A leaner workforce and poor staffing also create a challenge for employees looking to take vacation especially at companies with fewer than 200 employees, which includes 80 percent of total U.S. businesses, Walsh said.

On a personal level, many employees simply don’t have vacation plans.

“The stay-cation is the new reality,” Walsh said.

Other employees may not take vacation because they fear losing their jobs, and some companies promote that thought-process, Walsh added.

But for organizations that want to encourage employees to take a break, the remedy is simple: institute a use-it-or-lose-it policy.

Several years ago, Smyrna-based United Acceptance, Inc., a financial organization with more than 140 employees, shifted from a policy that allowed employees to carry over unused vacation time to one in which only 40 hours are allowed to roll from year-to-year, said human resources manager, Katrina Jackson.

Last year, only a handful of employees lost vacation hours, and about 65 percent rolled over the 40-hour maximum, Jackson said. “Most employees are good about taking their time off,” she said. “The management staff makes sure people are taking their paid time off, including themselves.”

Another solution said Walsh is to just allow people to take whatever time off they need. “If people resign or leave, you don’t have to pay unused vacation,” she said. The sticky part is figuring out how to manage people who may abuse such a free-flowing system.

West said she prefers a flexible vacation policy. When a team member goes on vacation, she tries to have as much respect as possible for his or her time off.

“I want people to like working for CWPR. I don’t want them to follow the mistakes I make,” said West, who now realizes the need to step away in order to fuel creativity. “I’m not going to deny someone the opportunity to go away and experience a great trip.”

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China passes new legislation focused on employer and individual misuse of entry visas and permits

By Janet Walsh|2012-07-06T09:52:03-04:00July 6th, 2012|Categories: Asian Business, Global Business News, Uncategorized|

On June 30, 2012 China passed legislation specifying entry and resident requirements affecting employers and individuals. Although the legislation is effective July 1, 2013, stricter enforcement by Chinese immigration authorities is expected between now and then. This new legislation also includes a new visa category for highly talented foreign workers, new bio-metric screening technology, and specific registration resident processes.

Companies that have traditionally given little thought to sending workers to China on tourist visas to conduct business should rethink their strategy in the light of heavy fines and penalties that accompany violations of this new law. China conducted a series of audits of its immigration compliance programs in selected cities around the country and found much evidence of lax enforcement. The focus in the coming months and years will be on stricter enforcement of existing policies including examination of “invitation letters”, and registration by foreigners of their location with the local police authorities (something typically done at hotel registration).

Businesses with anticipated Chinese travel requirements or current Chinese interests are encouraged to view the entire travel requirements on the Chinese embassy website or speak with their immigration professional.

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Janet Walsh Interviewed by Joyce Bone on “Establishing Business Operations Overseas”

By Janet Walsh|2012-07-03T22:47:35-04:00July 3rd, 2012|Categories: Birchtree News, Global Business News, Global Business Strategy, Global Finance, Uncategorized|

Janet Walsh Interviewed by Joyce Bone on “Establishing Business Operations Overseas”

Listen to Wall Street Radio Joyce Bone July 22, 2012 interview with Janet Walsh on key legal, financial, tax and human resources success factors in establishing a business overseas. Janet discusses doing business in the CIVETS and BRIC countries as well as types of industries going global and location incentives.

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Press Release: June 7, 2012 Janet Walsh Appointed to Global HR Policy and Standards Board

By Janet Walsh|2012-06-07T12:17:28-04:00June 7th, 2012|Categories: Uncategorized|

The Society of Human Resources Management has appointed Janet Walsh, CEO of Birchtree Global, LLC to the US Technical Advisory Group for the International Organization of standardization Technical Committee for HR Management. This committee of experts sets US national policy to draft ISO standards for SHRM. They also advise the American National Standards Institute on how to vote on any related global HR subject. Janet will join the group in Atlanta at the annual SHRM global conference where she will be speaking on aligning global human resources with continuous improvement programs.

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Birchtree Global Management

By Janet Walsh|2012-06-04T17:03:09-04:00June 4th, 2012|Categories: Uncategorized|

Janet Walsh is the CEO and President of Birchtree Global, LLC a business services firm that provides small and medium-sized companies integrated legal, financial, and human resources start-up services needed to successfully enter foreign markets. As CEO of Birchtree Global for the last 15 years she has worked in 67 countries leading cross-discipline, multicultural teams of attorneys, CPA’s, tax and HR professionals, on site, in over 68 countries creating foreign subsidiaries. She created the “Global Company in a Box(c)” concept that provides incorporation, registration, immigration and human resources infrastructure as a highly efficient way for small and medium-sized firms to establish their company outside of their home market.

In addition to her work with Birchtree Global she is an experienced, corporate leader of global change activities including human resources, technology and infrastructure development, shared services, mergers and acquisitions, and divestitures. Her in-depth industry experience includes software, technology, services, medical, manufacturing, financing and services.

Janet is a visiting professor at Keller Graduate School of Management, the second largest accredited MBA school in the United States. She is the curriculum designer and architect of the global HR MBA capstone course for Keller Graduate School and the curriculum designer for the course Business Analytics for Devry University.

She holds an undergraduate degree in Economics, an MBA, and is a Doctor of Business Administration candidate. She was a contributing author to the textbooks, “Economics for Managers” and “HR Metrics”. In addition she served on the Board of Directors for the World Trade Center Atlanta for ten years and currently serves on the Board of Advisors for Devry University. She can be contacted at: walsh@birchtreeglobal.com.

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“Funding Foreign Direct Investment in China(c)”

By Janet Walsh|2012-06-04T16:04:29-04:00June 4th, 2012|Categories: Asian Business, Global Business News, Global Business Strategy, Global Finance, Uncategorized|

“Funding Foreign Direct Investment in China(c)”
by
Janet L. Walsh

The Chinese economic market is powerfully attractive to foreign direct investment. Despite predictions for a slow down, projections for the rate of real GDP growth in China is currently a robust 8.7% (United Nations, 2012).

Companies interested in expanding operations into China do so to follow their customers, improve their supply chains or manufacture at reduced cost. Companies considering a move to China may find it helpful to look at the entry strategies of firms currently operating in this market. Different types of businesses are expanding into China but the following four broad categories of organizations represent some of the most active areas of foreign direct investment (FDI).

a. Medical and health related technology, manufacturing, and services

b. Alternative energy, solar, wind

c. Light manufacturing including consumer goods, industrial production

d. Technology related businesses, manufacturing, and services

Although in the recent past, FDI into China focused on manufacturing there is a rising demand for service sector, professional services including legal, financial, accounting, human resources and retirement. Several areas are of particular interest to those interested in this market. For example, incentives for FDI in China include an aging population, the average age in China is 37 (Dezan Shira, 2012) and more than 60% of the population smokes (Ma, 2010) making health care, retirement communities, medical device manufacturing, and technology businesses take notice.

Services businesses however face different market entry hurdles than do manufacturing firms. Firms in this sector often face additional regulatory requirements that include the involvement of local companies or organizations. As a result service sector firms may find purchasing local “mom and pop” companies or strategic alliances the easiest way to enter this market,

China’s labor rates are increasing. This makes manufacturing in China not the bargain it once was but higher salaries and desire for a broader array of products mean more opportunities for retail sales (Dezan Shira, 2012). Standing on the Bund in downtown Shanghai is not much different than standing in the middle of any other large western, sophisticated city where one can purchase a luxury watch, shop for Prada clothes, drink gourmet coffee, and drive around in a Buick. General Motors, for example, a participant in the Chinese car market for many years, finds this country to be their largest market for car sales (China Business Review, 2011).

Chinese industrial upgrading and green energy initiatives are a feature of the 12^th Five Year Goal Plan the cornerstone of state central planning. These initiatives have attracted US FDI from wind, solar, and lighting companies (Dezan Shira, 2012).

Also featured in the Five Year Goal Plan are technology incentives with the objective of increasing China’s technology impact from production to innovation. This emphasis on growth offers partnership opportunities for technology, software, and IT firms to access a growing market (Dezan Shira, 2012).

Businesses currently operating in or expanding into China are funding expansion through some of the following foreign direct investment strategies:

Joint Venture

China Investment Financing

Chinese Government Funding

Capital Raise

Investing Revenue from Growth Operations

FDI into Traditional Entry Ports-Hong Kong/Singapore

Multiple Investment Strategies

Private Placement Funding

Examples are as follows:

Joint Ventures:

Joint ventures, partnering with a local Chinese firm for vertical or horizontal integration strategies, have two important advantages. The first is the advantage of an immediate presence in country and the second, a partner familiar with the business landscape. An established firm is also able to access government funding more easily than a foreign firm new to the market. China Cord Blood Corporation, a life sciences company which stores umbilical blood stem cells is one example of a successful partnership which has benefited from Kholberg Kravis Roberts & Company’s capital investment of $65 million (China Cord Blood).

For these joint ventures a key component of success is managing expectations, costs, performance measures, and cultures.

Cessna and Aviation Industry Corporation of China, an aviation joint venture and Ascletis a joint venture between United States and Chinese entrepreneurs in specialty therapeutics for cancer and infectious diseases, are two other recent examples of successful joint ventures in this market.

Chinese Investment Financing:

In the future, funding for operations in China may increase as the government seeks to develop a more robust, freely traded internationalized Renminbi currency (RMB). For example, from 2010 to 2011 there has been a quadruple rise in “dim sum bonds” or “Ronald McDonald Bonds.” These bonds are money raised in RMB in China to support Chinese investment. Companies such as McDonald’s, Tesco, BP Capital and L’Air Liquide have benefited significantly from this type of investment (Kriegler, 2011).

A recent conference with HSBC bank’s “Business Without Borders” group on May 16, 2012 in New York City, moderated by the Economist magazine’s Global Forecasting Director, Leo Abruzzesse, also discussed the rising attractiveness of RMB financed bonds particularly as the currency becomes more internationalized.

Chinese Government Funding:

Companies entering the Chinese market find two government funded programs. The first is direct investment by the Chinese government and second the development of economic free trade zones and corresponding incentives for locating in a zone. The Chinese government’s 12^th Five-Year Plan has as one of its focuses R & D funding for emerging technologies. China is raising R&D funding for emerging technologies by 159% to as it anticipates moving from manufacturing technology to innovating technology (Lux, 2012).

For example, Ascletis has received a record level research and development grant from Hangzhou National Hi-Tech Industrial Development Zone under that organization’s “5050 Plan.” The 10 million RMB grant (approximately US$1.6 million) is the largest startup company grant in the history of the 5050 Plan, whose goal is to incentivize and assist start-up, technology-based companies within HHTZ, Hangzhou, Zhejiang Province (Ascletis).

As China opened its markets to foreign direct investments economic development zones were established in cities like Shanghai and Beijing. The economic development in these zones varies significantly and illustrates the role the state and local conditions play in successful investment (Yehua and Chi Kin, 2005). For example, Coca Cola established bottling operations in Shanghai in the 1990’s which induced their suppliers such as the Mead Corporation to become established in the region to support their customer.

Capital Raise:

Metaps Inc. a Japanese firm is a company that specializes in increasing revenue for Smartphone apps, provides a one-stop shop service for Smartphone app developers, from boosting traffic through monetization. Metaps has arranged private placement financing to raise US$4.2 million from five venture capital firms. The proceeds from this capital raise are to be used to increase the company’s Asia-focused business platform (Metaps).

Multiple Investment Strategies-Public/Private/Investment:

Large organizations, such as Siemens, benefit from multiple investment strategies to finance their global operations, combining public, private investment, and revenue from growth operations (Katz, 2010). Smaller firms can also use this concept to fund investments that may serve to hedge any concerns over disruption in elements of their strategy.

As mentioned, General Motors’s has done well with multiple strategies to establish a strong presence in the auto manufacturing market. Their efforts have been helped by Chinese subsidies and other incentives (China Business Review, 2011).

Growth Fund Investments:

Growth Fund Investments offer another way to enter the Chinese market.

Sino-Ocean Land Holdings Limited its subsidiary Gemini Investments Limited and KKR China Growth Fund, L.P., a China focused investment fund managed by Kohlberg Kravis Roberts & Co L.P. has established an investment process to capitalize on the long-term potential in China’s real estate market (Sino-Ocean Land Holdings Limited).

Revenue from Growth:

Entry into the China and Asian markets can be funded through revenue from growth operations as evidenced by the LED lighting industry. The use of LED lighting to lower energy usage is increasing as the price declines for LED products.

Given the amount of infrastructure development business opportunities are being created for LED lighting systems and prices are expected to rise sharply after 2015 according to a recent report from Pike Research. They project revenue from LED lighting in the Asia Pacific region to total $11 B USD through 2021 (Pike). This rising revenue growth can be transferred into building local strength and presence in this market.

Foreign Direct Investment into traditional entry ports such as Hong Kong:

Historically Hong Kong has been a gateway for foreign direct investment into the Chinese mainland. Companies that wish to enter the Chinese mainland market but lack experience or business partners begin the process by entering into Hong Kong a special economic zone. Hong Kong has a high per capita GDP but also some of the highest land and labor costs in Asia, much more expensive than the lower cost Chinese mainland. Entering the Chinese market through Hong Kong, establishing a sales or subsidiary office on the island and production facilities on the mainland is a useful market entry strategy.

The duty free status for Hong Kong goods into mainland China, minimized restrictions on Chinese tourists visiting Hong Kong, and the aging population in Hong Kong offer business opportunities in manufacturing, retail, tourism, and health related businesses.

Private Placement Funding

Private placement funding is a fairly typical way to enter a foreign market and may involve multiple investors sharing the risk. Metaps Inc. announced they have arranged private placement financing from five venture capitals. The proceeds from this private placement will secure human resources from the Singapore-based, wholly owned subsidiary “Metaps Pte. Ltd.”, and also to advance the company’s Asia-focused business platform.

In conclusion, there is no one fixed methodology to entry the Chinese market. The above illustrations provide a short summary and serve to illustrate the broad range of options firms have when considering foreign direct investment. These options should be considered in light of future trends and opportunities as this market continues to evolve.

References

Ascletis, I. c. (0001, April). US-China Pharmaceutical Venture Ascletis Receives Record-Level Research and Development Grant from Hangzhou. Business Wire (English).

China Cord Blood, C. (0004, December). China Cord Blood Corporation Announces Investment by KKR. Business Wire (English).

Huang, D., 2012. Emerging Asia Comparison: China vs. India and Vietnam. Dezan Shira Publications, Bejing.

General Motors Races Ahead in the China Market. (2011). China Business Review, 38(2), 54.

Katz, J. (2010). Siemens Puts Green on Fast Track. Industry Week/IW, 259(8), 34.

Lux, R. (2). Innovation China: The Middle Kingdom Boosts R&D Funding on Emerging Technologies by 159% to $18 Billion. Business Wire

Kriegler, Y. (2011). Dim sum finance: tasty. Lawyer, 25(43), 10.

Lux R. Innovation China: The Middle Kingdom Boosts R&D Funding on Emerging Technologies by 159% to $18 Billion. Business Wire (English) [serial online]. 2:Available from: Regional Business News, Ipswich, MA. Accessed May 30, 2012.

Ma, S. (2010). Affluence prompts more women in China to light up. CMAJ: Canadian Medical Association Journal, 182(12), E557-E558. doi:10.1503/cmaj.109-3307

Maitland, E., & Sammartino, A. (2012). Flexible Footprints: RECONFIGURING MNCs FOR NEW VALUE OPPORTUNITIES. California Management Review, 54(2), 92-117. doi:10.1525/cmr.2012.54.2.92

Metaps, I. c. (12). Smartphone Monetization Platform “Metaps” Secures US$4.2 Million Funding, Accelerating Its Asian Expansion from Singapore. Business Wire (English).

Pike, R. (4). Revenue from LED Lighting in Asia Pacific Will Total $11 Billion Through 2021, Forecasts Pike Research. Business Wire (English). Regional Business News, Ipswich, MA. Accessed June 4, 2012.

Sino-Ocean Land Holdings Limited and, K. (0009, May). Sino-Ocean and KKR Announce Real Estate Investment Platform in China. Business Wire (English). Regional Business News, Ipswich, MA. Accessed June 4, 2012.

SWOT Analysis. (2012). Hong Kong Commercial Banking Report, (2), 7-9. Retrieved from Business Source Complete, Ipswich, MA. Accessed June 4, 2012.

United Nations. (2012). World Economic Situation and Prospects 2012. Retrievedfrom//www.un.org/en/development/desa/policy/wesp/wesp_current/2012wesp_pr_eastasia_en.pdf

Yehua Dennis, W., & Chi Kin, L. (2005). Development Zones, Foreign Investment, and Global City Formation in Shanghai. Growth & Change, 36(1), 16-40. doi:10.1111/j.1468-2257.2005.00265.x

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New Educational Materials

By Janet Walsh|2012-06-01T00:13:36-04:00June 1st, 2012|Categories: Asian Business, Global Business News, Global Business Strategy, Global Finance, Uncategorized|

Birchtree Global is pleased to provide copies of our recently sponsored presentation on China, India and the ASEAN countries, updates from Dezan Shira’s Daisy Wang. If you would like a copy of the presentation please email info@birchtreeglobal.

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BBC Visit

By Janet Walsh|2012-06-01T00:10:09-04:00June 1st, 2012|Categories: Birchtree News, Uncategorized|

Janet Walsh at BBC worldwide headquarters in Manhattan

Janet Walsh was a guest at the sleek BBC headquarters in Manhattan for drinks and a conversation with award winning actor James Corden,

now starring in “One Man, Two Govnors”. Kurt Andersen, Peabody award winning host of Studio 360, provided a droll commentary on his rise

to stardom. She asked Corden if he thought there was a difference between comedy in the US and comendy in the UK. He replied, with a grin,

that he thought the audience reaction was the same and that there was little difference between comedy in the US and UK. The play is a huge hit on

Broadway and very funny.

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CIVETS, BRIC’S and FDI

By Janet Walsh|2012-05-17T09:59:26-04:00May 17th, 2012|Categories: Asian Business, Birchtree News, Global Business News, Global Business Strategy, Global Finance, South American Business, Uncategorized|

Birchtree Global, LLC New York based staff attended the Business Without Borders presentation hosted by HSBC bank in Manhattan on May 16. An excellent program on the emerging CIVETS countries and their attractiveness to foreign direct investment. The program was presented by Leo Abruzzesse Global Forecasting Director at the Economist Intelligence Unit.

Abruzzesse provided a compelling presentation on the emerging markets of Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa. He concluded that from a political, economic, legal and business perspective these growing economies are attractive FDI targets. His illustration of GDP growth patterns over the next several years showed the BRIC countries bracketing the CIVETS with the G7 countries at the bottom.

We asked him to compare the service sector investment opportunities in these countries. He and the panelists he brought with him indicated that services were needed but had different regulations that would require a slightly different approach to FDI. Acquiring an in country firm or merging with an in country firm was seen as the most expeditious approach.

HSBC bank provided a summary of their financial products and services that were designed to get cash back to investors more quickly improving cash flow. These were interesting and innovative, are worth considering and can be seen on their website.

Entry into these markets is not without risk and is more complex than market entry into the BRIC countries. We note that Birchtree Global has worked in all these locations over the past several years and can provide guidance to businesses wishing to establish company activities in these countries.

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Are you interested in working in partnership with top global leaders?

By Janet Walsh|2012-05-14T06:26:49-04:00May 14th, 2012|Categories: Global Business Strategy, Uncategorized|

Check out the Clinton Global Initiative (CGI), www.clintonglobalinititative.org. The mission of the Clinton Global Initiative (CGI) is to inspire, connect, and empower a community of global leaders to forge solutions to the world’s most pressing challenges. Emily Norton, one of my BU colleagues is an intern with CGI and gives them top marks for their programs and work. Check it out…They offer great internships which may be of interest to students!

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Yearly Archives: 2012