There are a number of advantages and disadvantages of doing business in countries with authoritarian or totalitarian regimes. In political science the term totalitarian governments can be regarded as a political systems and ideologies in which the social, political and economic as well as intellectual and cultural activities are subordinated in favor of those in power or the rulers of the state. In general terms, totalitarian government can also be regarded as mode of government in which the political authority exercises absolute and centralized power and control over all different aspects of life powered by one individual.
The totalitarian rulers strive to control all the aspects of both private and public life by influencing the society towards their common policies and goals. In most cases doing business with authoritarian regimes is a very risky intention and has some implications. One may be required to “pay bribes and kickbacks” despite being a corrupt and a hideous way of doing business to government officials in order to be allowed to conduct business in such countries (Aswathappa, 2008, p.117) failure to which one may be denied access to market and even forfeiture of investment in that country.
The many facets of the business law that deals with disputes is non-existent or defined vaguely by those in power and as a result they interpret it they way they please. In a country like China for example, the Human Rights groups are suppressed blatantly and this has made rulers in such countries to reinforce repressive measures on investments by Multinational Companies (MNCs). The ethical issues that emanate from this debate is whether the big firms should continue doing business in repressive totalitarian countries and whether they should continue paying bribes to these dictatorial rulers so as to gain access to the market.
Many MNCs will nevertheless choose not to care as long as profit-wise the business will flourish in such countries. The justification that many MNCs have had in doing business with repressive regimes is that the violation of human rights with improve significantly and thus are justified to do business with totalitarian governments. Many totalitarian governments have not problem with doing business with anyone as long as they abide by the business code of ethics in that particular country (Malachowski, 2001). Nonetheless, it may be difficult for the business to flourish in such environments of totalitarian barriers and government policies that may include permits, taxes and capital to start the business.