Browsing by Author "Parker, Talya"

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    Make or break : reputational risks facing Chinese companies operating in Africa’s extractive industries
    (Stellenbosch : Stellenbosch University, 2020-03) Parker, Talya; Lambrechts, Derica; Stellenbosch University. Faculty of Arts and Social Sciences. Dept. of Political Science.
    ENGLISH ABSTRACT: Multinational Companies operate in the political sphere where political risks are created. Political risk is an ever-evolving field with new risks emerging and old risks changing as the world continues to become more interconnected. Reputational risk has emerged as a field of study in recent years, commonly seen as a risk of risks, or realised political risk. Reputation has increasingly been ranked as the number one strategic risk facing multinationals, with threats to reputation stemming from several sources. Events such as the British Petroleum oil rig explosion in the Gulf of Mexico in 2014 catapult the study of reputation and its risks. Although much of the literature and research on reputational risk has been conducted in the commerce field, the links to politics are evident. The ungracious political characteristics of many African countries present a political sphere that contains multiple risks. Despite possible risks, China continues to invest vast amounts into Africa, focusing on extractive industries. Reputation is reliant on stakeholder perceptions; Chinese companies’ main stakeholder is their government, whose influence creates prime case studies for reputational risk. Chinese National Petroleum Company (CNPC) and Chinese Non-Ferrous Metals Company (CNMC) are the two companies focused on in this study, regarding potential reputational risks posed to the Chinese government as the main stakeholder. CNPC has invested major resources in South Sudan, with CNMC focusing their investment in Zambia. Dissecting the reputational risks presented by these countries and their political spheres to the Chinese companies operating in them was the goal of this study. The analysis of reputational risk in this study has taken place using a qualitative model that measures four factors: who, where, what and how. Each factor is accompanied by a certain number of indicators that help achieve an overall risk ranking. This study found that there are more significant reputational risks facing CNPC operating in South Sudan. However, CNMC is not immune to the reputational risks presented in Zambia. Reputational risk forms part of a full political risk analysis. From the reputational risk perspective, South Sudan is seen as a high-risk investment opportunity and Zambia a medium-risk investment opportunity.