Explore BrainMass

Trade Policies: Political factors, CPI report, CSR

1) Select a multinational organization that operates in the country where you live and work. What role did political systems play in the organization's entry into nondomestic markets? What political factors helped or hindered the success of the organization? Provide examples.

2) Each year Transparency International produces the Corruption Perceptions Index (CPI). You can review this annual report at Review the CPI. Define corporate corruption. What is the difference between illegal corporate behavior and corruption? What are the strengths and weaknesses of the CPI report? How might this report be utilized in international business?

3) Many countries set national trade policies or join regional trading blocs or multilateral organizations. Select a foreign country not adjacent to the country in which you live and work. Describe the trade policies of that country. What trading blocs or multilateral organizations does the country belong to? What are the advantages and disadvantages of trade policies and trade organizations?

4) In what ways are international corporations getting involved in corporate social responsibility (CSR)? List specific examples. How might geopolitics influence CSR? How do domestic social values affect an organization's CSR policy? How might international organizations manage corporate social responsibility across borders? Explain your answer.

Solution Preview

Company description:

Exxon Mobil Corporation is a multinational corporation and is the world largest company in the oil and gas industry having operations that span various countries in the United States, Europe, Australia/Oceania, Asia, Africa, and Canada/South America. In Africa the company has operations in Nigeria through three subsidiaries. Exxon Mobil deals in the production, exploration and transportation of natural gas and crude oil and manufacturing and transportation of petroleum products. The company also produces and sells petrochemicals which include polyethylene, aromatics, olefins, polypropylene plastics and other products (ExxonMobil, 2011).

Role political systems in Nigeria played in the organization's entry into non domestic markets

Political systems play an important role in an organizations entry into a non domestic market since they basically determine the regulatory environment of the business, the barriers to entry, the policies in business, the stability of the market, and international relations between countries. The political system of Nigeria basically federalist with a mixed market economic system (Daniels, Radebaugh, & Sullivan, 2010). The political system played an important role in the entry of Exxon Mobil into Nigeria. Nigeria's mixed economic system, market led ideologies and policies and good international relations with the United States facilitated the entry of this big giant into the Nigeria market especially after the discovery of oil wells in Nigeria, and the governments need for high tech companies to effectively and efficiently extract and manufacture and transport oil and gas. Under this political system, Exxon was able to retain a bigger proportion of ownership to the Nigerian subsidiaries operating in Nigeria while entering into the market. Similarly, international relations through World trade organization and its Trade and Investment Framework Agreement (TIFA) with the United States have played a major role in lessening the barriers to investing in the country (US Department of State, 2011).

Political factors that helped its entry include are favorable business policies and international relations as noted above for example international relations through World trade organization and its Trade and Investment Framework Agreement (TIFA) with the United States. Corruption in the Nigerian government though has been a major setback factor in the way the business carries it operation, with there being a lot of pressures in meeting the US regulations on corrupt practices, and facing the challenges of a corrupt government in Nigeria since it the government that owns all the oil in Nigeria and is the one responsible for awarding contracts to ...

Solution Summary

The expert examines international business trade policies. The political factors, CPI report and CSR are examined.