Question 1.

Given the Russian government’s history of interfering with private business, would
you make as large of an investment in Russia as BP has done?
Answer
Russia has always been a risky investment option due to an economy which is difficult to
understand and an environment which is highly unpredictable, add to this the crony capitalism and
an excessively interfering Republican government and we have the perfect recipe for disastrous
investment. However, this risk is heavily subsidized by the exceptional opportunities offered by a
country extremely rich in natural resources and an economy with a healthy growth rate. The
investment is justified if it can be backed up by efficient and dynamic leadership and Management
of the investment through employment of applicable strategy suitable to the Russian economic
environment.
Question 2. What are the pros and cons of this investment?
Answer
The opportunities can prove to be a major advantage for any organization with an efficient
management which has the capability to manage the risk effectively by converting the
disadvantages into advantages for the organization. British Petroleum has achieved this by
acquiring resent the management of which has adequate connections within the government,
providing the organization influential power within the government which has resulted in
controlling the most important disadvantage. Russia has exhibited excellent GDP growth in the
last decade with the human resource employability also increasing greatly along with overall
development of the economy due to technological advancement and development of the country
in all the major factors. British Petroleum has also availed support from the United Kingdom
government which has helped the organization to grow and sustain within the Russian economy
by furthering is hold within the oil sector through strategic alliances and acquisition. Whether the
means employed by the company are ethical or not is questionable. Resent is not accompany with
the reputation for upholding ethics and social responsiveness and sensitivity. The laxity of
regulations and legislation within Russia along with the influence the company holds within the
government have allowed it to flout all environmental norms and indiscriminately harm the
environment through vast oil spills. The major disadvantage for British Petroleum was from
political pressure with even its offices being raided in 2008, however with exceptional
management skills all major crisis situations were averted or controlled. The likes of Carrefour
and DeBeers withdrew silently while British petroleum employed strategy to overcome the crisis
and use it to its advantage.
Question 3. Does the fact that BP’s investment is suffering from Ukraine-related sanctions affect
your decision to invest in the country in any sense?
Answer
The Ukraine related sanctions that British petroleum faces do have an impact on the organizational
profitability and growth but it should not be the only factor which the decision to explore
opportunities within new markets are based upon. Expansion strategy is dependent upon various
factors and entering markets in different nations requires extensive rational analysis of all related
factors which impact the particular industry, segment and overall environment existing within the
nation by using adequate tools such as pastel.