The Times Australia
The Times World News

.
The Times Real Estate

.

Nationalism is surging – changing the way companies do business overseas

  • Written by Sihong Wu, Lecturer, School of Business, University of Auckland, Waipapa Taumata Rau



The resurgence of nationalism[1] across the globe is not just a political issue. It’s emerging as a powerful force that multinational companies cannot afford to ignore.

Recent events such as Brexit, Russia’s war in Ukraine and the United States election can have far-reaching implications for businesses.

These events can influence investor confidence and alter government restrictions on foreign companies.

Managers are increasingly faced with a key question: should they push forward with new initiatives targeting international markets or hang on and wait for acceptance from those local communities?

There is ongoing debate[2] over whether going global can directly help a company’s ability to innovate. Entering international markets can allow a business to gain new knowledge through connecting global production networks, accessing global talent and creating diversified global teams.

But what happens when a company’s plans to go global clash with nationalist sentiment – either at home or abroad?

Our research[3] looked at how two factors – a country’s focus on technological progress, and its nationalist sentiment – can affect companies’ decisions when it comes to expanding into the global market.

These factors are particularly important when it comes to the spread of new technology that might be perceived to go against national interests.

While it may be obvious that companies need to take the political temperature of a new market, our research highlights the complexity of national sentiments – and how these can alter internal business decisions.

Different reactions

In our study of companies from 27 countries, we found multinationals react differently to nationalist attitudes in their home country versus nationalism in the foreign countries where they operate.

We identified four broad scenarios.

  • There are more opportunities for a business to adopt innovative strategies when there is little to no competition over who gets the new technology first. This lack of nationalist sentiment allows the company to innovate using ideas from both countries.

  • When nationalist sentiment is strong in a company’s home country, a company’s technological development efforts tend to align with its government’s priorities.

  • In foreign countries with strong nationalist sentiments, managers often struggle with bringing new technologies to the market. This is, in part, due to difficulties in gaining acceptance in the local community.

  • Where nationalism is strong in both a company’s home country and the country it wants to enter, it becomes harder to successfully introduce new technologies. This is often due to local resistance as well as conflicts between nationalist groups and others.

Huawei logo
Huawei has struggled to expand in some countries due to fears over national security. Costfoto/Getty Images[4]

Progress vs national identity

Over the past two decades, there have been several examples of companies struggling to make inroads due to nationalist sentiment – either at home or abroad. There have also been a few success stories.

While we examined companies from multiple countries, China’s political relations with other nations provide several examples of why considering nationalism is important to multinational companies.

Aluminium company Chinalco, for example, failed in it’s bid to buy Australia’s Rio Tinto[5] in 2008. The Chinese company encountered significant resistance due to concerns surrounding its status as a state-owned enterprise.

China’s Huawei has also faced difficulties[6] in its efforts to expand its 5G technology. This is, in part, due to nationalist sentiment in concerns in countries such as the US and Australia over threats to national security and the need for technological sovereignty.

Our study also found that when nationalism and technological advances are combined, they can create a sense of techno-nationalism (when a country prioritises technological progress to enhance its global power). This can further influence a multinational company’s decision to stay or expand in a particular market.

Volkswagen, for example, was once a major player in China’s electric vehicle market. It now faces barriers to maintaining its market share in the country. The Chinese government is, instead, focusing on nurturing and supporting domestic manufacturers – sidelining the German company.

Similarly, Intel has responded to the US government’s push for semiconductor self-sufficiency by boosting domestic production, aiming to reduce reliance on foreign partners.

These examples highlight how the combination of nationalism and technological development goals can affect multinational companies.

Gaining local and global acceptance

Throughout our research, we found that to gain acceptance in a foreign market, multinational companies need to build a positive public image and foster genuine relationships.

Partnering with local businesses and non-governmental organisations can help them increase the credibility of their new ideas and acquire support support for developing new projects based on local needs.

When expanding overseas, companies also need to reduce the perception of excessive government involvement or political motives. Increasing transparency can help ease local and global concerns about the development and spread of new technology.

References

  1. ^ resurgence of nationalism (theconversation.com)
  2. ^ ongoing debate (www.sciencedirect.com)
  3. ^ research (doi.org)
  4. ^ Costfoto/Getty Images (www.gettyimages.com.au)
  5. ^ failed in it’s bid to buy Australia’s Rio Tinto (archive-yaleglobal.yale.edu)
  6. ^ Huawei has also faced difficulties (www.cfr.org)

Read more https://theconversation.com/nationalism-is-surging-changing-the-way-companies-do-business-overseas-241905

The Times Features

Why Regional Small Businesses in Bendigo Deserve Better Access to Finance in 2025

In the heart of regional Victoria, Bendigo has long stood as a beacon of innovation, resilience and community spirit. As we step further into 2025, the importance of nurturing sm...

Is It Time for a Deep Cleaning? Signs You Shouldn’t Ignore

Most people know they should visit the dentist for a regular check-up and cleaning every six months. But sometimes, a standard cleaning isn’t enough. When plaque and tartar build...

The Hidden Meaning Behind Popular Engagement Ring Cuts

When it comes to engagement rings, the cut of the diamond is not just about aesthetics. Each shape carries its own symbolism and significance, making it an important decision for...

Annual Health Exams in the Office: How They Can Reduce Sick Days and Healthcare Costs

Regular health check-ups, especially annual health exams in the office, can significantly impact the overall well-being of your workforce. A proactive approach to employee health...

Best Deals on Home Furniture Online

Key Highlights Discover the best deals on high-quality outdoor furniture online. Transform your outdoor space into a stylish and comfortable oasis. Explore a wide range of d...

Discover the Best Women's Jumpers for Every Season

Key Highlights Explore lightweight jumpers for spring and summer, ensuring breathability and ease. Wrap up warm with cozy wool jumpers for the chilly autumn and winter season...

Times Magazine

The Essential Guide to Transforming Office Spaces for Maximum Efficiency

Why Office Fitouts MatterA well-designed office can make all the difference in productivity, employee satisfaction, and client impressions. Businesses of all sizes are investing in updated office spaces to create environments that foster collaborat...

The A/B Testing Revolution: How AI Optimized Landing Pages Without Human Input

A/B testing was always integral to the web-based marketing world. Was there a button that converted better? Marketing could pit one against the other and see which option worked better. This was always through human observation, and over time, as d...

Using Countdown Timers in Email: Do They Really Increase Conversions?

In a world that's always on, where marketers are attempting to entice a subscriber and get them to convert on the same screen with one email, the power of urgency is sometimes the essential element needed. One of the most popular ways to create urg...

Types of Software Consultants

In today's technology-driven world, businesses often seek the expertise of software consultants to navigate complex software needs. There are several types of software consultants, including solution architects, project managers, and user experienc...

CWU Assistive Tech Hub is Changing Lives: Win a Free Rollator Walker This Easter!

🌟 Mobility. Independence. Community. All in One. This Easter, the CWU Assistive Tech Hub is pleased to support the Banyule community by giving away a rollator walker. The giveaway will take place during the Macleod Village Easter Egg Hunt & Ma...

"Eternal Nurture" by Cara Barilla: A Timeless Collection of Wisdom and Healing

Renowned Sydney-born author and educator Cara Barilla has released her latest book, Eternal Nurture, a profound collection of inspirational quotes designed to support mindfulness, emotional healing, and personal growth. With a deep commitment to ...

LayBy Shopping