What is a multinational enterprise (MNE)? How do physical and social factors affect how an MNE functions in a foreign country?
Answer: The multinational enterprise (MNE) is a company that takes a global approach to foreign markets and production. It is willing to consider market and production locations anywhere in the world. However, most writers use the term to mean any company with operations in more than one country. Physical factors, such as a country's geography or demography, and social factors, such as its politics, law, culture, and economy, influence the functioning of an MNE. Physical and social factors can affect how companies produce and market products, staff operations, and even maintain accounts. Geographic barriers—mountains, deserts, jungles, and so forth—often affect communications and distribution channels. And the chance of natural disasters and adverse climatic conditions (hurricanes, floods, droughts, earthquakes, volcanic eruptions, tsunamis) can make business riskier in some areas than in others, while affecting supplies, prices, and operating conditions in far-off countries.