In what way do different ideologies and political systems influence the environment in which MNCs operate? Would these challenges be less for those operating in the
EU than for those in Russia or China? Why, or why not?
Each country has its own political system and ideology, it may even differ between one region and another. A multi-national corporation when entering to any new market, it should see all the differences that may make its business harder or easier. Even though going into a new market can bring a lot of profit and trade easier, it also can be costly in the long run because of certain laws and regulations. In our case in comparing the European Union to Russia and China, it may be easier to operate in the EU. Russia and China are former communist nations and this means the government has control over many industries till now. This makes the political risk higher. Another side is the fluctuation in currency, where money can change value very fast, which may cause problems when it comes to business especially on an international level.
Power and money are the number key roles that influence MNC’s. If there are big rewards for companies such as revenue and certain laws to be put in place or eliminated and it benefits all parties the government and MNC’s will follow lead.
Russia, India and China all have their individual inconveniences including unsettled minorities and locales. Most likely, the reason is that Western MNCs have more noteworthy collected experience managing business situations in remote grounds – where it’s satisfactory to stay and where not- – while the BRIC ones are as yet getting their feet wet. Political outputs can be deadly if implemented for the wrong reasons.
Ian Bremer (2017), Times: These Are the Top 10 Risks to the World in 2017. (n.d.). Retrieved February 07, 2017, from