➙ It can be very difficult for MNE executives to calculate how much leeway they have when negotiating with a host country. The answer largely depends on the extent to which the company needs the country or vice versa. If managers perceive the country as being crucial to their internationalization plans, they will tend to show greater flexibility. Conversely, where a particular location is important to them, they might drive a harder bargain to get better market entry conditions. This latter approach is often constrained by ethical considerations. It is bad for a company’s reputation to be seen as bullying a host government, especially where a developing country is involved.
