Since Russia's full-scale invasion of Ukraine in February 2022, hundreds of Western companies exited the Russian market. This protest action was mainly driven by ethical motives and the impact of international sanctions. However, especially in business, it is unsurprising that such an interpretation of ethical conduct was not universally shared. For instance, Nestlé and Auchan continued operations, explaining their decision by the need to supply essential products to the population. Whether this was their real motive remains debatable, but the decision drew significant criticism toward these brands. 

The dilemma of compliance versus resistance is not only a question of personal morality but also a matter of political, social, and economic significance — because this choice determines how a society functions under authoritarian pressure: whether it tolerates illegitimate governance, what the society experiences collectively — fear or solidarity; and how much the power of civic, collective will is forged and spread in this process. In such contexts, this dilemma often becomes the decisive axis shaping political trajectories. 

Businesses rarely operate in ideal democratic conditions, and they are constantly forced to balance financial stability with moral responsibility. This balance becomes especially challenging in environments where power centers tend toward authoritarianism. In such circumstances, companies face a difficult strategic decision — how to maintain business stability while remaining aligned with ethical values. 

Today, as authoritarianism grows globally, answering the following questions becomes particularly relevant for political leaders, policymakers, analysts, and citizens concerned with strengthening democratic institutions: 

• Can businesses function under an authoritarian regime without becoming complicit?  
• Do companies have an obligation to oppose the government, or is survival their primary mission? 

Against the backdrop of political developments in Georgia, autocratic rule is no longer a distant threat — it has become our reality. Georgia, which for years was considered an example of post-Soviet democratic progress by Western partners, is today closer to the model of authoritarian governance than democracy. This trend has clearly manifested in both the suspension of various international support and growing uncertainty and risk in the business climate. 

Between 2021 and 2023, the European Union allocated €63 million under the European Peace Facility (EPF) to strengthen Georgia’s defense forces' medical, engineering, logistics, and cyber defense capabilities. In 2024, support from the European Peace Facility was suspended due to deteriorating conditions in the country. 

In 2024, the European Union suspended €121 million in planned funding intended to support Georgia's economic development and EU integration. This decision was directly linked to democratic backsliding in the country and political positioning increasingly aligned with Kremlin-style rhetoric (source: Politico, 2024; EUISS Report). 

Georgia’s democratic backsliding has also prompted strong responses from the United States, including visa restrictions on senior Georgian officials accused of undermining democratic values. (U.S. Embassy In Georgia) 

These political developments have had a corresponding impact on the business sector. According to data from Georgia’s National Statistics Office (Geostat), foreign direct investment (FDI) in Georgia amounted to USD 197.7 million in the third quarter of 2024 — a 55.2% decrease compared to the revised figures for the third quarter of 2023 (Geostat, 2024). 

The Business Association of Georgia (BAG), which unites over 100 medium and large companies, publicly expressed concern that political instability, especially around the "foreign agents" bill, is harming the investment environment. Although BAG did not directly oppose the bill, it openly urged the government to improve communication with the public to avoid long-term damage to the economy (Wikipedia, Business Association of Georgia statements, 2024). 

In today’s reality, business must operate in an environment where long-term development depends not only on market dynamics but also on political loyalty and flexibility toward the ruling government. Accordingly, current decisions carry weight beyond individual companies’ well-being — their role is critical in shaping the country’s strategic economic and foreign policy direction. This in turn intensifies the following question: can business remain an independent actor, or is collaboration with the demands of an authoritarian system inevitable? 

Business Strategies Under Authoritarianism: Historical Experience 

Adapting to authoritarian regimes is not a new phenomenon for business. Historically, there have been three main strategies companies used to survive under such regimes: 

1. Cooperation — Germany’s Precedent 

Through collaboration with authoritarianism, Germany achieved high levels of industrial development. Before World War II, major industrial companies like Krupp and IG Farben grew economically because their businesses were closely tied to the Nazi regime. They received state contracts and financial support, but ultimately, the historical and reputational damage was immense. 

While cooperation with an authoritarian regime may yield short-term benefits for any company or organization, in the long term, moral and reputational collapse is inevitable. 

2. Complete State Control — The Soviet Model 

In contrast to Germany, where businesses retained some independence, the Soviet Union completely destroyed the private sector. Industry was nationalized, and companies were required to fully obey the state. If the state fully controls the economy, business must comply or disappear. 

3. Hungary — Modern Authoritarian Capitalism 

Viktor Orbán's rule clearly illustrates the coexistence of authoritarianism and capitalism. In the 1990s, Hungary’s government reduced corporate taxes to attract foreign investment and created favorable conditions for business. Orbán’s economic policy relied on three main approaches: 

1. Foreign companies benefit from low tax rates (9%), but in exchange, they must support state policy; 

2. Suppression of free media and NGOs, ensuring minimal public criticism; 

3. Preferential treatment for “loyal companies,” while weakening opponents. 

As a result, two parallel economies emerged — a sector strengthened by foreign capital and a local business sector dependent on state intervention. 

Orbán turned this economic polarization into political power. He strengthened a segment of business with government backing, while imposing state control over foreign capital. Business can operate under authoritarianism, but only if it follows the rules set by the government and avoids opposing the political agenda. 

Considering these historical examples, we can say that Georgia faces real threats and specific warning signs that demand timely and effective decisions — not just in politics and civil society, but in the business sector as well. The country is at a turning point. The process of democratic backsliding has accelerated in recent years, culminating in the EU’s decision to suspend €121 million in support after the 2024 parliamentary elections — clear evidence that Georgia is losing its European partnership (Politico, 2024). 

Under these conditions, businesses face three alternatives: 

• Cooperation with the government to maintain stability; 

• Active resistance and protection of democratic values, with all associated risks; 

• Neutrality — but is neutrality really possible, or is silence itself a form of submission? 

For businesses operating under authoritarianism, neutrality is merely an illusion. Where is the line between stability and submission? Do companies really have a choice? 

Some global companies, like Google, exited the Chinese market because they refused to comply with censorship demands. However, this decision came at a financial cost. Fully exiting a market is not an option for everyone — many companies build infrastructure, partner networks, and brand recognition over years in a given region. Walking away not only leads to financial loss but can also mean losing regional influence entirely. 

On the other hand, companies like Nike and H&M initially criticized forced labor practices in China, but once they faced sanctions and boycotts, their stance softened significantly. Neutrality, which initially seemed like a pragmatic solution, turned out to be a victory for the regime. In business, neutrality often equates to submission, not survival. 

So how should companies act under these conditions? 

The first path — submission and full cooperation with the government — may offer short-term stability, but in the long run, the business becomes entirely dependent on the will of the government. Historical experience shows that authoritarian regimes may be partners today, but tomorrow, they may seize or destroy a company to serve their own interests. A business that functions entirely at the whim of the government ceases to be independent — it becomes an instrument of the regime. 

The second path — active resistance — requires openly and publicly defending democratic values, which comes with serious risks, including boycotts, regulatory sanctions, public discreditation, or restricted market access. However, this is what elevates a business from being a mere economic player to a socially responsible entity. This position, especially from an international perspective, can strengthen customer loyalty and global reputation. Yet, such companies often become targets of systematic persecution by local authorities. This strategy demands both internal courage and strong support networks, which are often inaccessible to small or medium-sized businesses. 

The third path — exiting the market and refusing to operate in an authoritarian environment — is impossible for many, as it impacts not just one country but the entire region's economic relationships. Moreover, when a company exits for political reasons, its place is quickly taken by players with fewer ethical boundaries. What may seem like a morally principled move could in practice have the opposite effect — the local market, once filled with diverse and competitive players, becomes dominated by companies loyal to or controlled by the government. This increases the risk of an economy dependent on centralized political influence. 

Thus, in a reality where business must operate under authoritarian governance, neither neutrality nor full compliance ensures long-term safety or stability. The only path that offers real survival for business is resistance. But this doesn’t necessarily mean open confrontation or immediate market exit. Rather, it calls for intelligent strategies such as: 

Maximizing Business Independence 

A company’s brand, corporate culture, and values must not become tools of government propaganda. The company should clearly define boundaries between its own identity and the state’s ideological agenda. This can be achieved through: 

• Carefully designed marketing communications (avoiding signs of coerced loyalty); 

• Strengthening values-based internal codes of conduct; 

• Respecting employee freedoms, which grants legitimacy to the brand in the eyes of both internal and external audiences. 

Independence is not confrontation — it is the accurate definition of survival conditions. 

Market Diversification — Geographically and Operationally 

If a company’s operations are entirely dependent on a single political regime, it faces serious risk — one political change or regulation could halt its entire functionality. For example, the Finnish tire manufacturer Nokian Tyres, which had much of its production concentrated in Russia, was forced to leave the country in 2022 due to the war in Ukraine and ensuing sanctions. The company lost its main production base and came under severe financial and operational stress. That is why, for long-term stability, it is essential that companies develop their markets, partnerships, and production infrastructure within a diversified environment to minimize reliance on any single political center. 

Thus, market diversification is a prudent strategy that specifically includes: 

• Geographic expansion: diversifying into regional markets with varied legal, political, and economic environments. 

• Distribution of products and services: strengthening business lines less dependent on dominant government interests. 

• Reevaluating partner structures: replacing singular local partnerships with collaborations involving international cooperation, reducing the effectiveness of domestic pressure. 

Diversification is not merely market expansion — it functions as an immune response against authoritarian interference. 

Integration into Global Networks — Building Interdependence 

Cooperation with international organizations, trade associations, and partners makes it more difficult for authoritarian governments to establish total control over businesses. The more integrated a company is within international structures, the harder it becomes for regimes to isolate it. The necessary steps for integration include: 

• Joining international trade platforms and coalitions; 

• Partnering with international NGOs and human rights organizations; 

• Actively participating in global ESG (Environmental, Social, Governance) initiatives. 

Such involvement provides businesses with an additional layer of protection — international accountability, which compels governments to act more cautiously. 

Strategic Use of CSR (Corporate Social Responsibility) 

CSR programs must not serve as funding channels for state propaganda. On the contrary — a well-crafted CSR strategy can become: 

• A tool for responding to real societal needs (rather than reinforcing the ruling power’s ideological narratives); 

• A platform for employee engagement, strengthening internal resilience; 

• A means for public discourse — enabling companies to communicate their stance on critical issues. 

In authoritarian contexts, CSR can become the safest method of breaking the silence. 

History shows that neutrality in authoritarian regimes is only a temporary illusion. A company must either choose the path of strategic, well-thought-out resistance, or ultimately become a tool of the regime. 

To remain not only financially sustainable but also morally viable, a business must pursue a strategy of intelligent resistance — one that integrates: 

• Independence with caution, 

• Responsibility with international engagement, 

• Moral stance with economic acumen. 

This is not merely a difficult decision for businesses — it is the real path to long-term survival.