In the International Spotlight, Vietnam
Management 4600 – International Management
CRN 85418 9/09/2011
1. In what way does the political environment in Vietnam pose both an opportunity and a threat for the American MNCs seeking to do business there?
The political environment poses an opportunity for American firms because the Vietnamese government is now working hard to attract U.S. investment. Their Government is continually being innovative and perfecting mechanisms and policies to encourage all non-state economic sectors to expand investment, including the U.S., to increase the efficiency of foreign investment. Now American companies have the chance to gain a strong position by investing while the political opportunities are good. The United States has emerged to become the largest investor in Vietnam, accounting for 47.8 percent of total newly registered capital. (Vietnam Business News Online)
Becoming the 150th member of the World Trade Organization shows the country has the willingness to open its trade doors and a strong political move to prove that the country is willing to abide by outside rules and regulations. This would impress investors and would likely consider doing business with Vietnam.
Being a communist nation, the government still closely controls the economy and U.S. firms may find that their opportunities will be limited and a number of unforeseen possible legal problems may exist. Typically a communist government does not care for a multinational business as they only want what’s best for their country. An example of this type of action would be that the government will try to pawn one multinational off against another in order to gain a better position for itself. This would sour relationships between those multinational investors while only making minimal or short term gains for them.