Question

In what ways do different political systems and ideologies influence the environment in which Multinational Enterprises operates? Multinational enterprises from emerging markets—Brazil and India are beginning to challenge the dominance of developed country MNE. What are some advantages that these firms from emerging markets bring to their global business? How might MNE from developed countries in North America respond to theses challenge

Answer 1

The international political systems and ideologies have major influence on the environment in which Multinational Enterprises operate. A multinational enterprise refers to a business firm incorporated in one nation that has production and sales operations in several other nations. Today the international political climate on the whole is improving. Former communist nations are enjoying the gains of free market system that have helped to stimulate productivity over communal ownership, and as a result providing new opportunities in the global markets for MNCs.

Several obstacles are faced by multinational enterprises when attempting to enter emerging markets such as India, or Brazil. The foreign investments have a positive effect on flourishing the economy through the rise in GDP, inflation decreased, and increase in employment. They have realised that encouraging diversity or competition stimulates the motivation and improves the efforts to achieve goals, however the risks of doing business in many of these countries are still high. MNE from developed countries in North America can removed most barriers to trade and investment. These may continue their hold holdings throughout the world to rapidly grow in the emerging markets and expand their global reach.