Six years after the publication of Kant’s Groundwork in 1791 Maria von Herbert, a student of
Kant’s moral philosophy, writes a letter to Kant. The l
etter asks Kant’s advice. What is Herbert’s
request for advice about and how does it relate to Kant’s moral philosophy? Consider Kant’s
reply: is it satisfactory (1) as helpful advice and (2) as a philosophical reply?
Indeed, ‘the ideal political conditions for a foreign firm is a stable and friendly government’ (Ghauri & Cateora, 2014: p.91). Both political climate and continuity of the set of rules established in a country are essential elements of the cultivation of good relations between companies and governments in a mutual beneficial and prosperous way. As Agawal & Feils (2007) suggest, ‘Political risk is highly relevant factor during the pre-entry and post-entry stages of the “process” model of internationalization.’ (p.166). Therefore, it is ideal for multinational companies to rely on stability to, sustainably, expand and invest. As mentioned, political changes have a great impact on the company’s decisions and marketing strategies. In fact, changes in the political scene have reflections into more factors than just trading policies. When a new government introduces import restrictions and trade tariffs, it affects the prices of goods, since companies trade expenses are increasing (Mor, 2017). In addition, additional border checks make the transport and distribution of commodities slower and more expensive. However, the introduction of tariffs is followed by a variety of non-tariff technical barriers, such as different product standards in labelling, packaging and safety (Mor, 2017). Combining all these together, it is obvious that not only are all four P’s in the marketing mix affected, but also the strategy which is designed by the marketers (Baines, Fill & Rosengren, 2017). Furthermore, apart from the impact to the global economy, political changes affect currency power. To be more precise, changes in governments which influence stock markets and trade, affect the value of the currency (Samson, Wigglesworth & Bullock, 2017), since its depreciation causes the equilibrium in trade to collapse (Melvin & Sultan,1990). Indeed, the value of each country’s currency affects the exchange rates followed by changes in import and export expenses, effecting the company’s competitiveness in foreign markets (Cox, Chu & Rodionova, 2017). Nevertheless, companies, in order to minimize the impact of the political uncertainty and risk, will reassess and readjust a great part of their international marketing strategy, which is thus how they enter the markets, choosing a safer path than the Foreign Direct Investment (FDI). Indeed, ‘the higher the degree of country risk, the greater the probability is that exporting (contractual agreement) rather than FDI as a market entry strategy will occur at the early (late) standardization phase.’ (Malhotra, Agarwal & Ulgado, 2003: p.19). In other words, FDI implies a ‘higher level of commitme>GET ANSWER