In lieu of suspending operations, or withdrawing from the country, a MNC will usually take one of two routes to manage political risk: adaptation or dependency. What is adaptation? What is dependency? What are the four characteristics of adaption and dependency?
A multinational company may decide to manage political risk through either adaptation or dependency. Adaptation means the company makes changes to its operations to accommodate to the country's political risks. If a company determines the risk is relatively low or that a high-risk environment is worth the potential returns they may choose to maintain operations in the host country and adapt to the political ...
This detailed solution discusses paths multinational corporations (MNC) take take in lieu of suspending operations or withdrawing from a country. Adaptation and dependency are explained, and their characteristics are outlined. Includes APA formatted references.