A generation ago, Asia was a marginalized region, and the financial community was not well developed. Over the years, it has grown and today it is the center of the global economy. It is essentially the engine of the economic world. Ultimately, the growth of Asia translates to growth for the world as a whole. This economic growth has been made possible by the people and their leaders. The political aspect of a region plays a significant role in the economy since it is keen on setting up different legislative steps so as to ensure the growth of the economy. Therefore, it is important to realize the fact that political stability in a region is paramount. Political leaders should, therefore, step up so as to maintain a constant economic growth. Political matters have a predominant role in the consumption of a product since it affects social factors too.
Asia has played a significant task in the consumption of American products, though it is quite evident that political instability has brought a great change in the rate of sales to the Asian regions. For that reason, it is vital to ensure that strategic steps are taken to ensure that our sales stay up consistently. In the recent past, Pacific has used about 14% of our products; this is an evident fall from 41% in 2010 and 42% in 2010 (Culp). Also, Japan has shown flat rates in the recent past. As mentioned earlier, Asia has a great role to play in the growth of the company and if the rate keeps on going down, it would be a great challenge for the company rates at large.
Political instability has been significantly experienced in areas like Thailand and Myanmar. There is also a significant effect regarding democratization. The authorities have considerable influence on the business activities taking place. In Indonesia, despite the fact that they got a new president, Joko Widowo, there are still some uncertainties in the political context, since he has preferred to use domestic policies. In Malaysia, there is some tension between the current Prime Minister, Najib Razak, and Mahathir Mohamad. The friction is quite evident and somehow reflects a politically unstable country (Phung). These are just but a few examples that display the political situation in some Asian countries. For political stability to be achieved, it is vital for the Asian region to work as a team and form an economic community which would assist in attaining the goals of the foreign market, and this would affect our corporation too. It has however proven difficult to develop an integration of a politically stable region. It is somewhat seen as an illusion due to the internal political upsets and more so the external political pressures.
Despite the decreasing rate of sales, political instability has crippled business operation and has also disrupted the supply chain. It has led to an escalating rate of income inequality, and uncontrollable corruption. China, for example, had a standard measure of 40.2% in 2008 and has increased to 47.3% in 2013 and indeed the rate is seen to increase up to date (Phung). It has also proved as a great challenge to our employee’s safety, and this should, therefore, ensure severe measures are taken to reduce its effects so that we can bring or corporate back to its previous sale rates as before.
It is the responsibility of the organization to take charge and prevent exposure to political instability effects to the company itself and the society as a whole. The current situation regarding politics has to be keenly considered in the process of changing the current Asian operations of the company. The changing operations should affect the employees, various business strategies and to some extent managing the political influence of the company in the Asian regions. These strategies will help in minimizing the political risk of political instability to the company and also increase the sales in the long run.
Recommendations Risks related to political instability cannot be entirely removed, but a multinational corporation can take necessary steps to limit their effect.
First, it is vital to comply legally with the ever changing legal restrictions that are caused by factors like political instability in the country. If there are conflicting leaders who would want their effect to be felt in the economy, they end up changing various aspects of the foreign trade. It is evident that such steps will affect our company as a multinational corporation, but it is only wise to comply so as to be on their right side hoping for better.
It is vital to put in place feasible and dynamic strategies of crisis management so as to ensure that in case the political instability leads to a crisis there would be a way to get past such situations and most importantly ensure business continuity so as to allow the sales rates to stay up.
Another strategy would be to keep up with the political fields so as to play an active part, as a way of giving back to the society. The company could assist in sponsoring and endorsing Democratic leaders who will help improve the economic community.
It is also vital to consider insurance policies to cover both the company and its employees should there be any adverse effects of political instability in various regions.
These strategies are bound to bring benefits to the company, though there is quite a challenge because the company will have to adjust its budget to cater for the changes in Asian operations. For these recommendations to be a success, massive investments need to be input. With the hard work and determination of our company’s leadership, the sales will improve.
Thank you,
Works Cited
Culp, Steve. "Forbes Welcome." Forbes.com. N.p., 2016. Web. 4 May 2016.
Phung, Albert. "What Is Political Risk And What Can A Multinational Company Do To Minimize Exposure? | Investopedia". Investopedia. N.p., 2006. Web. 4 May 2016.
(U.S.), Coca-Cola. "Public Policy Engagement - The Coca-Cola Company." The Coca-Cola Company. N.p., 2016. Web. 4 May 2016.
