Policy uncertainty is the most common and perhaps most frustrating form of political risk in global business, especially when changes in laws and govern meant policies directly undercut sizable investments made by foreign companies. Royal Dutch Shell joined with Russia-based Gazprom, a state-owned company, to develop Sakhalin-2, one of the world's largest liquefied natural fields. Shell gas and its partners took the lead role with 55 percent ownership and $20 billion a investment. However, after years of development and billions invested, the Russian government banned foreign companies from owning more than 49 percent of any enery development project. This forced Royal Dutch Shell to relinquish majority ownership to Gazprom in return for $7.45 billion and greatly reduced its access to other Russian gas fields.
Several strategies be used adapt to the political risk can to minimize or in global business. Avoidance is used when the political risks with a foreign viewed great. If firms are already country or region are as too invested in high-risk they divest sell their businesses. If they have not areas, may or yet invested, they will likely postpone their investment until the risk shrinks. Control is an active reduce political risks. Firms strategy to prevent or using a control strategy lobby foreign governments or international trade agencies to change laws, regulations, trade barriers that their business or hurt in that country. Another method for dealing with political risk is cooperation, which involves using joint and collaborative contracts, such as frank ventures chasing and licensing. Although cooperation does not eliminate the political risk of doing business in a country, it can limit the risk associated w foreign ownership of a business. For example, German company forming a joint van a true with a Chinese company to do business in China may structure the joint venture contract so that the Chinese company 51 percent or more of the owns joint venture. Doing so qualifies the joint venture as a Chinese company and exempts it from Chinese laws that foreign-owned businesses.
5 Becoming Aware of Cultural Differences of the more interesting and amusing aspects of global business are the People over there." street journal cultural diff the two hey do columnist Geoffrey princes, way an inch Fowler wrote of dent in Hong Kong who Chinese co re a he Uttered in the United glue casually States, such comments would be considered indicates that in China where people openly talk about people's weight, dos shapes, and salaries, such comments are probably just friendliness. So what Fowler say when his friendly Chinese colleagues him fat? "There's so good food here