COUNTRIES AND NATIONS

Political Risk and Changing National Priorities

The nation-state remains the building block of the contemporary international political system. Each country in the world has, by definition, its own political system. Political leaders shape the priorities of national governments. When there is mismatch between the direction political leaders deem appropriate and those important to the polity, nations sometimes change their leaders to reflect their priorities. This is easier to do in some countries than in others.

In order to plan and ensure success, businesses interested in in any given country will need to understand the policies and political priorities of the target country. Sometimes there may be a mismatch between the intent of the company and the policy priorities of a nation and management needs to understand the political consequences and plan accordingly.

In a global world with interdependence and interconnectedness between national economies as well as the ubiquitous accessibility of news and information at all times, political priorities also span beyond the borders of any given nation, bringing a new set of considerations to play. Prudent management constantly monitors changing situations, trends and issues to adjust plans accordingly. These forces may play out not just at a national level, but also at regional or subnational level.

Federal Reserve Bank of St. Louis – Falling Oil Prices Create Winners and Losers by Scott A. Wolla

As a result of the dramatic changes brought on by the technology revolution and free-trade, top management faces new challenges with respect to national political priorities.

Federal Reserve Bank of St. Louis – Global Monetary Policy Amidst Deflationary Concerns by Ana Maria Santacreu.

There is a fundamental shift in the political power taking place, away from national governments and in favor of business leaders. With access to global supply chains, companies can rapidly shift resources to take advantage of any new opportunities. Yet, as these business priorities shift people often find themselves unable or unwilling to adjust to the changes. The contemporary backlash against integration as evidenced by Brexit and the tariffs imposed by the United States since 2017, reflect the actions of politicians responding to these sentiments in making policies.

However, unless we are prepared to return to an era of national protectionism policies and isolation, business leaders need to become active participants in shaping new political agendas. This will need to start with asking the questions about how people and companies create value in an era of global business and how to create value that is embraced by national and global citizens.

TED Talks – What is economic value and who creates it? by Mariana Mazzucato

A TED element has been excluded from this version of the text. You can view it online here: https://oer.gsu.edu/globalbusiness/?p=97

TED Talks – The dirty secret of capitalism and the new way forward by Nick Hanauer

A TED element has been excluded from this version of the text. You can view it online here: https://oer.gsu.edu/globalbusiness/?p=97