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Multinational Business Midterm - Essay Example

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1. Dimension of Distance Location or geography is one of the determinants of success next to customer (Mohanty 31). In connection, in deciding for a good business location, political environment is always taken into consideration. A country will encourage more investors if its political setting is mature, stable, and certain at a national level…
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Multinational Business Midterm
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Download file to see previous pages It has a total land area of 527,968 sq km (203,849 sq mi), and it is the 50th largest country in the world (“Middle East: Yemen”). As of 2011, the total population of Yemen is 24,133,492 (70% are Muslims or Arab), which is number 49 in the world ranking. Yemen’s type of government is a Presidential Republic, and it has a 2-part legislature (House of Representatives & Shura/Consultative Council) with an executive branch headed by President Ali Abdullah Saleh (head of government & state) and Prime Minister Mohammed Mujawar. The country’s election is generally held every after 6 years for the lower house and 7 years for the President; however, many allegations have aroused regarding the poor regulation of the electoral system, which is considered unfair and fraudulent in many grounds. “Jews, Christians, and Hindus, the non-Muslim indigenous minorities, may vote but according to a 2001 Election Committee decision, they cannot hold elected office” (“International Religious”). The Yemeni Constitution is according to Shariah or Islamic law; thus, many issues about religious discriminations and human rights violations have emerged, which lead to violent protests and demonstrations. Uprising against the government of President Saleh had started in early 2011 when the Yemenis had asked him to resign after 21 years in the presidency since the reunification in 1990. The people have demanded Saleh to step down because the country is not well-managed under his administration as shown in the country’s high unemployment record (11%), deep poverty, and government corruption. In fact, there are only 57% and 39% Yemenis believed that the government has the capacity to improve good governance, peace, and poverty level (“Yemen Ranked 106”). Since the violent protests and demonstrations, the security and political setting are deteriorating. This made Yemen a deeply divided and poorest nation in various world indices, particularly in the Arab world (Bakri and Goodman). The Yemenis are highly discouraged on their government’s position about environmental preservation, particularly in the country’s oil resources and freshwater. There are several environmental regulations that have been enacted to govern hazardous wastes, soil erosion, desertification, carbon emission, and many more, but these are not properly observed and seriously implemented by the government. Culture. In every investment, customs and behaviors of people are necessary factors of success because these will determine if the company’s domestic product/services are acceptable in the new market. Figure 1 shows Yemen’s national culture using Hoftstede’s cultural dimensions. Figure 1: Index Scores of Hofstede’s Dimensions for Selected Islamic Countries (2009) Source: (Eune and Lee 1217) The figure illustrates that Yemen is a low power country, which indicates that there is fairness in the distribution of power. Also, a high score in individualism gives more importance of personal choice and not in the group. Furthermore, Yemen has a moderate masculinity score, which indicates that the society is focused on future achievements and motivated by success in terms of money, material things, and work. Yemen has a weak uncertainty avoidance, which means that people are prepared to take risks because they are comfortable in ambiguous situations. A low score in the long term ...Download file to see next pagesRead More
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