Article Discussion: French Corporate Nationalism comes to fore over Carrefour
Comments Based on National Business and Economic Cultures
The nature of economic practice in France is a highly nationalized aspect. The national cultures of business in this country do not easily allow private foreign companies to run giant firms within the barriers of this nation (Hall & Soskice, 2001). From the 17th century, France’s finance ministry has tried to kill big international companies that pose great competition. From this point of view, France is bent on nationalizing its businesses in every aspect to stop monetary losses. The French portray an economically conservative nation that cannot allow themselves to be controlled economically when big companies that employ most French citizens are privatized to foreigners. Nationalism has been a pivotal part of the traditional economic and business culture of the country. The political uproar has recently displayed the tradition about the Carrefour privatization deal, which is a privately owned retail giant in the French economy. It is also the biggest purchaser of agricultural produce in France, making it arguable that it provides food security to the county.
The Carrefour retail business is a privately owned venture, and thus the government should find out from the owners the reasons for wanting to sell it. If the reasons are economically sound, the government may help them financially to prevent them from selling it. The money offered by the Canadian retailer is a lot, and if the operating capital of the business is not worth that much, then the owner may decide to sell it for the money. In the determination of the deal, the French Finance Minister, Bruno Le Maire, courteously denied the privatization shift. Of course, the economic tradition has to prevail. Every big company in France must be run by French citizens (Khan & Law, 2018). However, the reasoning behind this is not economically satisfactory to every well-informed citizen. The French Finance Minister said that they prevent the transfer of the ownership of the hypermarket to the Canadians to maintain food security within the country. Instead, they came out, which would also indicate how vulnerable the government is to external economic control, and told the public that the county had decided to protect the national economic supremacy. The food sector of the economy is highly critical, but it is not only the Carrefour hypermarket that sells food entirely to the French. Incredibly, the government did not even check on the Canadians’ investment plan for the business. The business and economic culture of nationalism have to prevail in some circumstances.
Comments Based on economic and business systems
Every country has its own economic and business systems comprised of institutions and decision-making tools used to determine how the national economic activities are carried out. In this context, the transfer of ownership decisions by the financial institutions in France relies on the ministry of finance’s final decisions (Lumen Boundless Business, 2021). The business and economic system in France is planned and responds to the commands from the central authority, i.e., the government. The decisions by the government determine the economic dimension the businesses take. I guess that is why the government was bold in canceling the Carrefour shift of privatization deal. France’s foreign takeover rules are strong enough to deny any chance of a foreign company acquiring a local company in France. The French government did not consider the reasons, whether financial or managerial, why the French owners of Carrefour agreed to the deal of selling their business to the Canadian retailer. The culture of nationalism, which firmly guides the company and economic patterns in France, does not allow foreigners to run mega-companies that provide large markets to local products and employment to the French citizens.
In my opinion, the French government is right in its decision. Foreigners may purchase businesses that are doing well nationally to provide a market for their foreign products. If that is the case, then insecurity sets where the local producers will find that vast market for their products. According to Professor Emmanuel Combe of SEKEMA Business School, there is the Coronavirus pandemic which has posed an economic threat to every nation, including France. Many countries face lockdown situations and should thus level up in every sector of the economy to be self-reliant in all aspects. According to the professor, foreign investments are economically advantageous to a country, especially in terms of foreign exchange, which is agreeable. However, France’s economic and business system is deeply rooted in nationalism. Thus, the government must defend its historical economic principles but not politicize them based on the coming presidential elections. Ideally, a country has to be politically firm when safeguarding its beliefs and systems. France is protecting its economy against intrusion by foreign capitalists, but on political grounds, making it economically wrong. It is difficult to comprehend how nonconformists can become patriots in political realms to avoid losing their seats. Macron, the French president, was initially opposed to the idea of nationalism. However, seeking to protect his seat in the coming presidential election, he positively commended his minister of finance for the decision he made to not allow the privatization of the Carrefour hypermarket to the Canadian capitalists.
Comments Based on varieties of capitalism
Capitalism occurs in various varieties. Every country has its independent kind of capitalism that they have adopted economically. Capitalism is categorized as either free-market economies or regulated market economies (Hall & Soskice, 2001). France, among other nations, has adopted the regulated market economic system where the government highly regulates the market. In such an economy, if politics does not come into play, and the leaders are not thwarted by the fear of losing their political seats in the coming presidential elections. The government can deliberately choose to be biased in its capitalist criteria. Many political leaders are applauding the minister of finance for canceling the Carrefour deal, including the president of France, Macron. They defend the country’s business and economic culture to retain their seats in the coming presidential elections. However, the government has demonstrated that it can be biased in its dealing, especially if the business is less competitive nationally. In the article, the French government supported and finalized a deal involving the purchase of various low-cost stores owned by less competitive French citizens by Aldi of Germany, made by the competition’s authorities of France. No politicians intervened in the case. Thus, the French government can be termed as insecure in the face of high capital investments by foreign companies.
The French government controls the foreign investment strategies but does not consider the status quo of the very companies it is regulating their capitalization. The government does not care if the Carrefour hypermarket is performing poorly or not. Whether the aisles are packed to the brim with goods or empty is not their concern. How it operates is not their concern too. All the French government cares about is that it is a big business that provides a huge market for local produce and has employed most French citizens. The lack of concern by the French government concerning industrial economic activities has been made clear by the coronavirus pandemic. The scientific industries cannot produce the covid-19 vaccines promptly.
Consequently, the government has not provided any public vaccine manufacturing industry to give enough supplies to the country and surplus for purchase by the EU. The government does not care if a multi-billion-dollar company collapses or not, but the company must not be privatized to a high-capital foreign company. The Institute Pasteur neglected its manufacturing projects, while the projects involving vaccine production by Sanofi experienced many delays without any intervention by the government. Valneva, a biotech company co-owned by French and Austrians, is currently manufacturing their vaccine s in Scotland. Capitalism should not prevent foreign companies from investing in France. Capitalism, whether free-market economy or the controlled market economy, should invest in foreign companies since they come with more economic benefits like foreign exchange, new skills, and expertise, relatively high taxes that contribute to revenue, etc. Therefore, in my opinion, the government should evaluate the reasons behind the ownership transfer deals by an extensive national company and the plans the foreign capitalists have on running the business before killing the agreement.
Hall, P. A., & Soskice, D. (Eds.). (2001). Varieties of capitalism: The institutional foundations of comparative advantage. OUP Oxford.Jolita Vveinhardt (Eds.),
Khan, M. A., & Law, L. S. (2018). The role of national cultures in shaping the corporate management cultures: A three-country theoretical analysis. Organizational Culture.
Lumen Boundless Business. (2021). Introduction to Economic Systems. https://courses.lumenlearning.com/boundless-business/chapter/introduction-to-economic-systems/