Sign Up Now
Get instant access to over 1 million+ study documents
OR
Already registered? click here to login
By creating your account, you agree to our terms of service, privacy policy and student honor code.
Global Business and Politics: Risk Management
When it comes to managing international risk, there are three main areas that must be addressed: political risk, economic risk and social risk—i.e., the limits to expansion. This presentation will address each of these three risks and show how expansion of the scope of the organization should proceed.
As DiDraga (2013) notes, the scope of risk management is based on three points: 1) analysis—i.e., posing the question of what happens if…, 2) response—i.e., formulating an answer to the question posed in point 1; and 3) control—i.e., monitoring the situation and making adjustments when necessary (DiDgraga, 2013). These three points should be considered whenever risk is to be managed.
Political risks can be seen everywhere today. The recent case of “Brexit,” with the UK voting to leave the EU, has created an international environment in which nationalism and new trade deals are a constant issue. In America, the concept of an “America First” policy has been put forward by the Trump Administration—and it has, in turn, put pressure on other countries, from Canada to China, in terms of a how free and fair trade will be pursued. In other parts of the world, political instability can lead to market crises, currency crashes, and production halts. Case in point is Greece, which has attempted to show foreign investors that the country is open for business and would like to see more...
Other countries have taken note and investment in Greece continues to be sluggish. Managing political risk, therefore, depends upon assessing the political situation of the target country and determining whether the stability there is authentic, whether the political leaders are likely to form good partnerships with businesses seeking to invest in the country, and whether there is likely to be any profit for both sides as a result of the investment. A country like China, which has recently had President Xi Jinping’s name written into its Constitution, shows tremendous stability, politically speaking, and its leaders have demonstrated a great interest in forming strong business relationships with entities looking to work with China to build a multipolar world (Amin, 2017). In order to manage political risk, it is important to understand what the political leaders of a host country want and to gauge whether or not the business can work within the established parameters to effect a win-win situation for both the organization and the host country.
Economic risks are another story. They very often follow from and/or are connected to political risk—as politics and economics are typically intimately connected—and…
References
Amin, S. (2017). The Sovereign Popular Project; The Alternative to Liberal Globalization. Journal of Labor and Society, 20(1), 7-22.
Bergin, P. R., Glick, R., & Wu, J. L. (2013). The micro-macro disconnect of purchasing power parity. Review of Economics and Statistics, 95(3), 798-812.
Costigan, T., Cottle, D., & Keys, A. (2017). The US Dollar as the Global Reserve
Currency: Implications for US Hegemony. World Review of Political Economy, 8(1), 104-122.
DiDraga, O. (2013). The role and the effects of risk management in IT projects success. Informatica Economica, 17(1), 86-98.
Papaioannou, M. (2006). Exchange rate risk measurement and management: Issues and approaches of firms. IMF Working Paper.
Purkayastha, D. & Rao, A. (2014). Wal-Mart in Africa. ICMR. International Marketing, by Ghauri and Cateora, 4e, McGraw Hill Education, UK, 2014.
Political and Economic Differences Consider Effects of the financial crisis on the developing world vs. The developed world The 2008 financial crisis began in the American banking sector but its impact was soon felt around the world. Both the developed and the developing world were affected. However, not all nations were crippled by the drying-up of credit and consumer demand to an equal degree. Some nations were derailed in their attempts to progress
N.D. PP. 1). Yet with the recent wave of anti-American protests can these statements be integrated into a compelling narrative for long-term investment? Specifically, the answer is derived from qualifying the political risk variables associated with respective nation-states. Risk Variables While a plethora of political risk models exist, there are definitive items which comprise their ability to predict relative political turbulence. These factors include: The threat of war, social unrest, disorderly transfers of
South Korea The Political, Social, and Economic Institutions in South Korea South Korea was considered to be one of the "Asian Tigers," but that designation of strength did not stop the country from experiencing serious problems in the past. These were financial, but they were also social and political. The country went through rapid changes, including a financial crisis, but before that crisis occurred there were other issues with which the country
Societies are organized in an exceedingly gendered manner; that is, the “natural” difference between females and males and attributing distinct traits to both genders lies at the heart of all social institutions’ structures, right from families to job structures, to the private-public division, to power accessibility. Hence, resource access and the enjoyment of secure property rights remain highly gendered within several areas across the globe. Females, both minor and adult,
Columbian Drug Trade If Americans know nothing else about Colombia, they know that it is a place where people grow and package cocaine for use on the world market. This is, of course, a highly biased view of the country because Colombians do many things other than make and sell drugs and most Colombians are not involved in the drug trade at all. However, it remains true that much of the world's
Business Plan GBSGreen Building Solutions Company Description Product & Service Description Marketing Strategy & Plan Environmental Analysis (SWOT/PEST) Competitive Analysis Products and Services Pricing Promotion People Financial Analysis & Projections Profit and Loss Risks and Assumptions GBSGreen Building Solutions Business Plan According to the Environmental Protection Agency (EPA) the impact of commercial buildings on the physical and social environment are such that there is "not questioning the vast impact…" (Environmental Protection Agency, 2006) Commercial Buildings are reported by the U.S. Department of Energy's Energy Information Administration