ADAPTING TO FOREIGN ENVIRONMENTS
Most foreign firms face the challenge of adjustment. For example, a firm
based in the United States is accustomed to the legal, political, and economic
systems of that country and has devised ways to survive profitably in that
particular environment. Upon entering another country for the first time, the
firm needs to answer questions such as:
1. What is the country's political structure?
2. Under what type of economic system does the country operate?
3. Is the firm's industry in the public or private sector?
4. If it is in the public sector, does the government also allow private com-
petition in that sector?
5. If it is in the private sector, is it moving toward public ownership?
6. Does the government view foreign capital as being in competition or in
partnership with public or local private enterprises?
7. In what ways does the government control the nature and extent of pri-
vate enterprise?
8. How much of a contribution is the private sector expected to make in
helping the government formulate overall economic objectives?
The questions appear simple, but owing to the dynamic nature of polit-
ical and economic events, the answers are complex. Many foreign firms are
still investing in Hong Kong, even though the conditions that will exist after
1997 are very uncertain. Hong Kong firms such as Swire are investing outside
of Hong Kong because of the same uncertainty. Firms attempting to invest in
Eastern Europe and the Soviet Union are experiencing enormous difficulties
because the environment in those countries is very different from anywhere
else in the world, and the changes taking place there are so rapid and unpre-
dictable.
Foreign firms must be aware of their own experiences and how those
experiences have helped shape their managerial philosophies and practices.
In addition, firms must determine how the new environment differs from
their more familiar domestic environment and decide how managerial phi-
losophy and practice must be changed to adapt to the new environment.
based in the United States is accustomed to the legal, political, and economic
systems of that country and has devised ways to survive profitably in that
particular environment. Upon entering another country for the first time, the
firm needs to answer questions such as:
1. What is the country's political structure?
2. Under what type of economic system does the country operate?
3. Is the firm's industry in the public or private sector?
4. If it is in the public sector, does the government also allow private com-
petition in that sector?
5. If it is in the private sector, is it moving toward public ownership?
6. Does the government view foreign capital as being in competition or in
partnership with public or local private enterprises?
7. In what ways does the government control the nature and extent of pri-
vate enterprise?
8. How much of a contribution is the private sector expected to make in
helping the government formulate overall economic objectives?
The questions appear simple, but owing to the dynamic nature of polit-
ical and economic events, the answers are complex. Many foreign firms are
still investing in Hong Kong, even though the conditions that will exist after
1997 are very uncertain. Hong Kong firms such as Swire are investing outside
of Hong Kong because of the same uncertainty. Firms attempting to invest in
Eastern Europe and the Soviet Union are experiencing enormous difficulties
because the environment in those countries is very different from anywhere
else in the world, and the changes taking place there are so rapid and unpre-
dictable.
Foreign firms must be aware of their own experiences and how those
experiences have helped shape their managerial philosophies and practices.
In addition, firms must determine how the new environment differs from
their more familiar domestic environment and decide how managerial phi-
losophy and practice must be changed to adapt to the new environment.
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