The Art of Adaptation: Addressing Political Risk in Geographically Dynamic International Business Environments

The study understood that in the face of geopolitical dynamism, effective political risk management strategies are crucial for multinational corporations operating in diverse environments. By applying Institutional Theory, the paper however understood these organisations adapt and respond to institutional pressures, ultimately shaping their strategies and performance. Drawing from the literature, several key findings emerged, highlighting the importance of adaptive strategies, stakeholders’ collaboration, corporate social responsibility, dynamic capabilities, and experiential learning. Advancing research and practice in this domain, the paper advocated that scholars and policymakers should expand their focus beyond multinational corporations, employ diverse methodologies, address regional biases, and explore emerging trends. By doing so, they can contribute to a more comprehensive and nuanced understanding of political risk management strategies, enabling organisations to navigate complex geopolitical landscapes more effectively. The study provided recommendations, which include advocating that government and regulatory bodies should create an enabling environment for multinational corporations engagement with local stakeholders and encouraging multinational corporations to tailor their political risk management. More importantly, policymakers and other regulatory bodies are to recognise the role of corporate social responsibility in managing political risk, and also promote experiential learning among multinational corporations by facilitating the exchange of best practices, case studies, and lessons learned in managing political risk. These recommendations are simply stated among several others as a roadmap for governments and regulatory bodies to create an environment conducive to effective political risk management and sustainable development.