Consider that a domestic company operates in a single national policies environment in which institutional policies are reasonably predictable. Operating internationally exposes its managers to diverse and conflicting pressures from wide-ranging groups in different nations. Variations increase the challenge of interpreting different philosophies, laws, and attitudes on political freedom, property rights, and legal responsibility. Consequently, effective managers begin with the realization that when it comes to politics and laws, countries' different ideas result in different political and legal environments. They position themselves to compete by understanding these differences, rather than ignoring or, worse, resisting them.
No matter where an MENE goes the prevailing politics and laws affect its options and operations. China's political and legal environments, for example, require MNEs to rethink the best ways to acquire resources, make investments, adapt operating modes, and manage risk. Figure 3.1 identifies the political principles and legal outlooks that define a nation's business environment. This chapter will discuss how they influence the prevailing political ideology, shape the role of government, moderate the degree of political risk, and define the legal system.
Consider that a domestic company operates in a single national policies environment in which institutional policies are reasonably predictable. Operating internationally exposes its managers to diverse and conflicting pressures from wide-ranging groups in different nations. Variations increase the challenge of interpreting different philosophies, laws, and attitudes on political freedom, property rights, and legal responsibility. Consequently, effective managers begin with the realization that when it comes to politics and laws, countries' different ideas result in different political and legal environments. They position themselves to compete by understanding these differences, rather than ignoring or, worse, resisting them. No matter where an MENE goes the prevailing politics and laws affect its options and operations. China's political and legal environments, for example, require MNEs to rethink the best ways to acquire resources, make investments, adapt operating modes, and manage risk. Figure 3.1 identifies the political principles and legal outlooks that define a nation's business environment. This chapter will discuss how they influence the prevailing political ideology, shape the role of government, moderate the degree of political risk, and define the legal system.
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