Companies forego direct investments in violent areas

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The question is should companies Forego Direct Investments in Violent areas? POINT: MNEs should not make investments in violent areas because it puts MNE personnel at risk. MNEs are visible and therefore vulnerable to attack by anti- globalization groups, kidnappers, groups opposed to foreigners, as well as others. It is unethical to put employees in excessively dangerous situations. Employees who will take dangerous assignments are usually either difficult to control, excessively naïve, or addicted to the thrill of danger. Any country subject to extreme violence is not the kind of country to do business in. COUNTERPOINT: Where there’s risk, there are usually rewards. Companies need to take risks, as they have in the past, to develop markets. Violence is only one of many risks and should not be looked at in isolation. Risks from activities such as terrorism are the same whether you are in London, Madrid, Caracas, or New York. All areas have their risks, and many countries traditionally viewed as risky may actually be less risky than the United States or Britain. Some industries, such as petroleum, have to operate in violent areas because that is where the resources are. MNEs should operate anywhere there are opportunities, and develop plans to manage and react to risks as effectively as possible.

Reference no: EM131676135

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