Hostile Business Environments: Lessons from Venezuela
While some multinationals in Venezuela have abandoned operations and departed the country, others are playing the long game. How have those companies that remain managed to brave the storm of recession, crime and hyperinflation, and what lessons can they teach us about operating in the most challenging business environments? Survival strategies vary, but one thing is clear: if you can survive Venezuela, you can survive pretty much anywhere.
Strange though it may sound, Venezuela was once lauded for its exceptionalism. Decades of relatively democratic rule and sound macroeconomic management allowed the OPEC nation to outstrip its neighbors in stability, growth and social mobility. In the 1990s, Venezuela’s state-owned energy company PDVSA was uniformly viewed as an efficient, well-run enterprise. And yet, today the country is best known for its exceptionalism in other ways – crime, corruption and a collapsing economy.
A mountain of punchy headlines—“Venezuela Is Running Out of Toilet Paper”—cements the impression that the situation in Venezuela is so precarious that we might need to rethink our definition of “basket case.” But ominous though the upheaval might appear, it comes with a silver lining: the companies that survive it can teach us valuable lessons about enduring hostile business environments.