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Managing International Political Risk: Arising Challenges for Multinationals in a Changing World
(2018)
Political risk management is a basic area especially for multinational companies to study particularly these days. In the current global environment of high political risks and policy uncertainty, it is valuable to examine the evolution of political risk perceptions of multinationals and also the tools and techniques they use to skilfully manage such risks. It is an imperative for companies, countries, business professionals and politicians, to get together for discussion about future developments and about options for securing global solidarity to the good of people and business in existing normative frameworks.
In this respect, Würzburg International Business Forum’s International Business Conference (24-25 May 2018) brought academics, professionals, business people and representatives of the public sector from the world together to analyse the current situation, trying to foresee future developments regarding political risk management within the framework of foreign direct investment and all other activities of multinational corporations.
The current global financial and economic crisis has created an unprecedented recession and very high employment in addition to huge environmental and social problems. All these have stimulated discussions among economists regarding the need for a new paradigm allowing »fairness«, »ethics«, »social and ecologic responsibility« and »sustainability« to come to the fore in the economic system.
Entrepreneurship, innovation and internationalisation are substantially interrelated. In an increasingly competitive world economy these are getting more importance. In 2000 at its Lizbon meeting, the European Council set the objective of making the European Union “the most competitive and dynamic knowledge-based economy in the world”. Entrepreneurship, innovation and internationalisation are essential ingredients of achieving such objectives as they are now three of the most important factors for growth and job creation in open market economies.
SMEs are also very important in many countries (as well as in Germany where they play a critical role in forming a middle class society so called Mittelstand that is also the backbone of the German economy). On the other hand, it seems that SMEs in general (and also many German SMEs are reluctant to invest in foreign countries though export orientation historically has been the case). There may me various factual and psychological reasons behind this approach. However, increasing economic integration among nations forces companies to be involved in international business much more than earlier. In this line, foreign direct investment (FDI) has also become as 2 important as export business. In fact, FDI is currently has a pivotal role for international trade flows. At present two third of the world trade volume is under the control of multinational companies. Interestingly, multinational companies are not generally large or big companies as is supposed by many. They are rather smaller companies involved in FDI and other foreign operation modes such as international franchising, contract manufacturing, licencing etc. Together with those internationalisation tendencies SME´s cannot resist against the progressive movement of digitalisation or Industry 4.0. For this reason and because of the fact that many small-sized multinationals are also family owned corporations, it seems that internationalisation is now not an option but a must for nearly all companies; small or big.
So far, the internationalisation of SMEs and family-owned small firms and also small multinationals have been studied relatively lesser than the potential. In this respect, the WIBF’s 2st International Business Conference aimed to focus on international entrepreneurship and small firm internationalisation, and also on activities of small multinational companies.
Entrepreneurship, innovation and internationalisation are substantially interrelated. In an increasingly competitive world economy these are getting more importance. In 2000 at its Lizbon meeting, the European Council set the objective of making the European Union “the most competitive and dynamic knowledge-based economy in the world”. Entrepreneurship, innovation and internationalisation are essential ingredients of achieving such objectives as they are now three of the most important factors for growth and job creation in open market economies.
SMEs are also very important in many countries (as well as in Germany where they play a critical role in forming a middle class society so called Mittelstand that is also the backbone of the German economy). On the other hand, it seems that SMEs in general (and also many German SMEs are reluctant to invest in foreign countries though export orientation historically has been the case). There may me various factual and psychological reasons behind this approach. However, increasing economic integration among nations forces companies to be involved in international business much more than earlier. In this line, foreign direct investment (FDI) has also become as 2 important as export business. In fact, FDI is currently has a pivotal role for international trade flows. At present two third of the world trade volume is under the control of multinational companies. Interestingly, multinational companies are not generally large or big companies as is supposed by many. They are rather smaller companies involved in FDI and other foreign operation modes such as international franchising, contract manufacturing, licencing etc. Together with those internationalisation tendencies SME´s cannot resist against the progressive movement of digitalisation or Industry 4.0. For this reason and because of the fact that many small-sized multinationals are also family owned corporations, it seems that internationalisation is now not an option but a must for nearly all companies; small or big.
So far, the internationalisation of SMEs and family-owned small firms and also small multinationals have been studied relatively lesser than the potential. In this respect, the WIBF’s 3rd International Business Conference aimed to focus on international entrepreneurship and small firm internationalisation, and also on activities of small multinational companies.
With an estimated number of approximately 213 million, SMEs are the backbone of economies in many countries. They account for the majority of businesses and are important job creators by creating over 50% of employment worldwide. Therefore, SMEs play a critical role in forming democratic welfare of societies especially in developing countries. For this reason, International Business, particularly with a special emphasis on internationalisation of SMEs needs to be an integral aspect of higher education. International Business students need to learn that internationalisation is not only a business of big
multinationals but also a challenge for SMEs.
The Airline sector is probably one of the most international industries nowadays. Thus, one should expect that airline companies are also international orientated and show their open-mindedness through all the services they offer. Using the renowned cross-cultural Bennett scale to rate the degree of ethnorelativity, this empirical study aims at analysing the link between the use of foreign language in inflight magazines and the attitude towards foreigners in countries the airlines originates from. The authors discovered that there exists a strong correlation between the use of foreign language in inflight magazines offered to the passengers and the degree welcoming foreigners in the country of origine of the airline.
This volume combines twelve chapters written by fifteen academics from four countries namely Germany, Italy, Thailand, and Turkey. They are mainly based upon the outputs of the WIBF’s annual International Business Conferences. With this regard, we thank all participants for their contributions to the discussions, the referees for their time and energy, and the chapter authors in this volume for their willingness and expertise.