In addition to corporate activities focused on the social and economic goals of the host country and good corporate citizenship, MNSc can use other strategies to minimize political Vulnerability and risk.
1. Joint ventures: Typically less susceptible to political harassment, joint venture can be with either locals or other third country multinational companies; in both cases, a company’s financial exposure is limited. A joint venture with local helps minimize anti-MNC feelings, and a joint venture with another MNC adds the additional bargaining power of third country.
2. Expanding the investment Base: Including several investors and banks in financing an investment in the host country is another strategy. This how has the advantage of engaging the power of the banks whenever any kind of govt. takeover or harassment is threatened. This strategy becomes especially powerful it the banks have made to any to the host country; If the Govt. threatens expropriation or other types of takeover, the financial bank has substantial power with the government.
3. Licensing: A strategy that some firms find eliminates almost all risk is to license technology for a fee. Licensing can be effective in situations where the technology is unique and the risk is high of course, there is some risk assumed because the licenses can refuse to pay the required fees while containing to use the technology.
4. Planned Domestication: The strategies just discussed can be effective in forestalling or minimizing the effect of a total takeover. However, in those cases where a host country in demanding Local participation, the most effective long-range solution is planned phasing out, that is planned domestication. Planned domestication essence, a gradual process of participating with nationals in all phases of company operation.
5. Political payoffs: One approach to dealing with political vulnerability is the political payoff an attempt to lessen political risks by paying those in power to intervene on behalf of the multinational company. Political pay off have been used to lessen the negative effects of a variety of problems.
6. Good corporate citizenship: If the international marketer can make good corporate citizenship to the people of host country, then if will reduce the political rink. Because by corporate citizenship, the international marketer maintain social responsibility. And if it is maintained, the international marketer with get political support from the host country.
If the above issues are maintained by the international marketer, It is possible to reduce political vulnerability.
