Edited by Joseph Mark S. Munoz
Chapter 19: Geopolitical forces and strategic approaches for the contemporary corporation
This chapter focuses on the factors surrounding geopolitics – geography (natural and man-made), demographics, people factors, and cross-country relationships (Bronshtein, 2011) and how these factors impact the contemporary corporation. Country and firm operations are no longer confined by geographic boundaries. Economic integration through major trading blocs is blurring international boundaries. Internationalization is a platform where firms tap into new sources of factors of production as well as market opportunities to succeed and grow in a competitive global environment (Bartlett and Ghoshal, 1998). Border relations impact trade (McCallum, 1995; Helliwell, 1996). Major trading blocs such as NAFTA, the European Union (EU), ASEAN, and MERCOSUR have increased the ability of firms to trade across borders. These major trading blocs also provide firms within each bloc access to resources that may not be available within each country. Access to resources is a way in which specific countries in these trading blocs can grow. Porter (1990) views these resources as factor conditions. The presence of factor conditions can provide growth at the firm, country, and trading bloc level. As firms continue to grow within a trading bloc, the resources in one country can be shared by many countries within the trading bloc. As new countries are added in each trading bloc, the blocs become an even more attractive trading location. The expanding trading blocs subsequently gain the interest of global protagonists.
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