Six Sigma Team Dynamics
A surprising number of projects begin without considering the human resource aspect in mind. If a Six Sigma project were to be initiated without a project charter or without an explicit data collection plan, it would be considered lunatic behaviour. However, the same cannot be said about the Six Sigma team. Countless Project leads have […]
Is Globalization to Blame for the Economic Crisis ?
The global economic crisis that started in 2008 has engulfed the entire world and has laid waste to the process of globalization that was blamed by many as being the root cause of the crisis. After the American Investment Bank, Lehmann Brothers filed for Bankruptcy in September 2008, the entire global financial system was at […]
Modern Day Wage Slavery at Wal-Mart
With an annual turnover of $400 billion, Wal-Mart is usually the biggest company on the Fortune 500 list. Its presence has always been there in the top 5 companies for over the past decade or so. The company is also the nation’s largest employer with more than 1.3 million workers. Also, with the Walton family’s […]
Quality Control Techniques
Introduction Quality of product and services determines success or failure of the organization. Consumers expect the company to maintain high-level of quality and consider it an important aspect of satisfaction. Quality management, therefore, becomes very important as far as any organization is concerned. Quality management can be accomplished through various quality control techniques. Quality assurance […]
Role of Project Managers – Should Project Managers behave like Prima Donnas?
This article addresses the question: Should Project Managers behave like Prima Donnas? The question posed is about the role of the project manager and the ways in which he or she steers the project towards successful completion. The thesis statement is about the point that covers a broad range of topics and deals with a […]
The recent case involving GMR Group in Maldives wherein the new government cancelled the license of the company for the Male Airport illustrates the biggest risk that international businesses face when they operate in developing countries.
It is often the case that the change in government leads to a reevaluation of the contracts with the result that some of them are scrapped. This kind of approach must be avoided as international businesses operate under the assumption that the contractual obligations that they have entered with a particular government have to be honored by subsequent governments.
Added to this is the political instability in many developing countries like Nigeria where the continuous churn in the political landscape makes the operation of international businesses difficult.
In other words, the policy paralysis and the bureaucratic logjam because of political instability pose the biggest risk to international businesses.
The second category of risk that international businesses face is the prevailing economic structures in developing countries. For instance, many multinationals flocked to countries like Indonesia, Thailand, and Malaysia with great expectations. However, the Asian financial crisis of 1998 put paid to their economic activities because of the impact of the crisis on the economic structure of the country.
Indeed, prudent economic management is the key aspect here. In these countries, due to the mismanagement of the economy, the economic crisis ensued and this led to capital flight from these countries.
The key point here is that international businesses must be prepared to sudden changes in the economic situation in developing countries since the economies of these countries are not as deep and resilient like those in the West. Of course, the recent global economic crisis affected the resilience of the West as well but that is another topic altogether.
The third type of risk is societal which is to with the prevailing social situation in the developing countries. Because a certain section of the populace has benefited from the international businesses, the other sections feel left out and marginalized and they resort to pressurizing the government to include them in the developmental process.
As some authors have put it, the world is on fire because of ethnic hostility to the operations of the international businesses. This was the case in many countries in Africa and East Asia where the minorities who lost out from the opening up of their economies resorted to social unrest and societal pressure to jeopardize the operations of the international businesses.
Moreover, this risk has metamorphosed into outright rejection of international businesses in many countries. The spree of nationalization and taking over the operations of international businesses in many countries across the world has made life difficult for international businesses in those countries.
International businesses face many risks when they operate in developing countries and this article has discussed a few of those risks. The subsequent articles would go into detail about each of these risks.
It would suffice to state here that astute management and business friendly policies are needed from the governments of the developing countries if they are to attract foreign capital.
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Cross Border Mergers and Acquisitions and Some Recent Trends in this Field
February 12, 2025
