Factors Affecting the Running of a Multinational Corporation in Greece

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Factors Affecting the Running of a Multinational Corporation in Greece

A multinational corporation is defined as a company that operates in many countries (Skripak, 2013, p.87). Large companies are typically known to be multinational corporations. One example of a larger scale company well-known across the globe would be Amazon. Amazon is known for being an online marketplace which has mostly everything anyone could need, ranging from technology, to car parts, to decor. MNCs are popular due to the varying costs of labor and production, availability to resources, and cultural influence. Opening a multinational corporation introduces companies and countries to new cultures and ideas. This way, companies can get a new perspective they may not have thought of. Another perk of MNCs is to experiment in different countries and see where they are most successful.

Six different forces will be covered in this paper, ranging from natural forces to political forces. These are all different aspects of the country (Greece) that affect business dealings and play a part in the decision-making process of opening a MNC in any given country. The six types as mentioned previously are: cultural forces, economic forces, natural forces, demographic forces, political forces, and technological forces.

Cultural Forces in Greece

Greek culture is known to be open and inviting to strangers. As stated in this article funded by the European Commission (2013), the Greek word philoxenia can be defined as love of strangers. This leads to a heavy advantage in the business sector. Some countries have issues with companies from foreign countries coming in to set up shop, but Greece will welcome the new company with open arms. Philoxenia (European Commission, 2013) will allow for comprehensive business dealings between employees from the United States and employees from Greece. The love of strangers ideology also helps with introducing Americans to Greek culture, which will help them better understand their surroundings and be more comfortable in their new environment. Not only will this benefit relationships within the company, but also relationships with partners, suppliers, and anyone else the company comes in contact with.

Economic Forces in Greece

Greece’s economy thrives on the tourism and shipping industries (The Heritage Foundation, 2019). Greece’s unemployment rate is at 16.7%, which is an eight and a half year low (Trading Economics, 2019). This fairly high unemployment rate will also be a good factor in choosing Greece as a location for a MNC. According to an article in Time magazine, 30% of the Greek population are in poverty (Bremmer, 2019). Expanding there will give Greek people jobs and help fight the unemployment rate, which in turn will help the Greeks be even more inviting and open about the company opening a branch there. The high poverty rate will also be addressed and lowered by the opening of the MNC. High poverty and unemployment rates can cause citizens to be discouraged and afraid they will return to the economic recession they just crawled out of.

Natural Forces in Greece

Greece is prone to natural disasters. Some of which include wildfires, earthquakes, and floods. These things are obvious issues when owning a building in Greece. These things have the potential to completely destroy the building and even possibly harm or kill employees. A high level of natural disasters results in a high a high need for insurance for company property as well as insurance for the employees working there. A positive to the large number of natural disasters would be the country knows how to recover from them, and can recover quickly. Not many natural disasters happen in the United States, so if one were to happen, the company would most likely have a hard time coming back from it and knowing the next step in reopening operations.

Demographic Forces in Greece

Greek recently got out of a long economic hardship. In 2015, Greece attempted to get rid of its debt to the European Union by trading it for growth bonds (Lubben, 2015). The past economic problems in Greece raise red flags to begin business operations there. Although Greece is no longer having financial issues, there are still some worries regarding business dealings in the country. If the recession happens again, it will lead to the branch of the company to fail and most likely close up. This may cause the company to be discouraged about expanding to other countries again, and could cause potential loss in sales and customers. According to an article by Christian Bodewig and Wolfgang Fedler, 44% of 30-34-year-olds in Greece have received a degree from higher education (Bodewig, Fedler, 2019). This statistic doesn’t follow European standards which has an average rate of 40%.

Technological Forces in Greece

The information and communication technology market in Greece is doing better than it has in five years (Export.gov, 2019). This looks good for Greek’s economy. The better economy encourages companies to expand and get in Greece while the price is low and the economy is growing. Since many companies will be joining the Greek economy, competition will make operations more difficult. Greece is typically behind in the technological field, but has been lately integrating technology into typically manpowered jobs such as farming (Bodewig, et al., 2019). Integrating technology into the smaller jobs, like farming, will help slowly move it into the major business sector. Once the use of technology in business takes off, Greece’s economy will most likely start to benefit from it, and help get them far from their past economic struggles.

Political Forces in Greece

According to Time magazine previously mentioned, Prime Minister Kyriakos Mitsotakis will have a lot to do. Mitsotakis has a New Democracy plan that will greatly benefit the business sector (Bremmer, 2019). This plan will also help to keep Greece from repeating their past issues with their economy. This new leadership shows major potential for Greek moving forward. As the new prime minister works to better the unemployment and poverty rates adding new businesses would help him achieve this goal. Not only would opening a location in Greece be beneficial for Greek workers, but it would also give them a higher chance of obtaining a job in the United States as well. Offering jobs in both countries would help lower the poverty and unemployment rates greatly.

Conclusion

Greece has proven to be a great candidate for a MNC. While having some negative aspects, the positive ones outweigh and overcome them. The election of Prime Minister Mitsotakis will help push a growth in the business sector, not only for employees in Greece, but also employees in the United States. The small, certain integration of technology into farming will eventually spread into major corporations and businesses to help the economy grow more efficiently. Since Greece has made its way out of hard times, it has a promising future of not making the same mistakes twice and ensuring their country continues to move forward. The knowledge of recurring natural disasters will help the company prepare and adapt adequately to any unforeseeable challenges it may face from mother nature. Greece’s reputation for being open-hearted and kind to strangers will only benefit the company as a whole. Greece has been confirmed through its efforts to overcome and fight for a better future for itself and the Greek people.

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