Top leaders tend to focus more on status updates than on contingency planning. They devote far more time to internal execution and competitive risks than to external risks that can change the playing field. This means that many emerging market risks get cut from the senior leadership agenda.
3 Emerging Market Risks Companies Should Watch for in 2018
Populism, migration, and conflict in the South China Sea.
February 08, 2018
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Summary.
Emerging-market risks often get cut from the senior leadership agenda. But there are three potential events multinationals should pay attention to this year — because should they occur, they would severely disrupt market strategies, supply chains, and exchange-rate assumptions. These risks are: (1) the election of populists in Brazil and Mexico increasing the cost of doing business; (2) conflict in the Middle East or Africa renewing the migrant crisis in Europe; and (3) maritime confrontation between China and its neighbors disrupting trade routes. Research has found that few multinational firms conduct structured reviews of local economic conditions in between annual planning cycles. To ensure that 2018 results exceed expectations regardless of local surprises, corporate leaders should work with regional teams to monitor and assess these risks and put contingency plans in place.