In what Ways Can Political Risk Impact on the Operations of an International Company - Essay Example

Comments (0) Cite this document
Summary
In what ways can political risk impact on the operations of an international company? With reference to a company of your choice, evaluate the different methods for quantifying the level of political risk that the company might face. 1. Introduction The development of business activities in the international market is related to a series of risks…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER98.2% of users find it useful
In what Ways Can Political Risk Impact on the Operations of an International Company
Read TextPreview

Extract of sample
"In what Ways Can Political Risk Impact on the Operations of an International Company"

Download file to see previous pages As in its context, political risk is described as ‘the risk of loss of assets, earning power or managerial control due to politically based events or actions by host governments’ (Daft 116). From a similar view, Sharan (2011) notes that political risk is a term used in order to show the response of international companies to ‘political scenarios developed in host countries’ (Sharan 229). The aspects of political risk that international companies are likely to face are presented and analyzed in this paper. Reference is made to a specific company, Shell, which is well established in the global market. The political risk that Shell faces in Nigeria is used as an example in order to show that the specific type of risk is inevitable for firms operating around the world. Moreover, under certain terms this risk can severely threaten organizational activities in the host country, unless appropriate measures are developed in advance. 2. Political risk as a factor influencing the operations of international companies The political environment of a particular country can highly affect business operations in all its industries. Foreign firms operating in this country are also likely to be influenced by changes or turbulences in the local political environment. ...
Moreover, there are countries, which are most likely to face such problems, compared to others where political instability is rather low. For example, in ‘Indonesia and Sri Lanka’ (Daft and Marcic 88) social conflicts are quite common, increasing the political risk for foreign firms operating in these countries. Moreover, Aswathappa (2010) notes that political risk can affect business activities ‘in different ways’ (Aswathappa 131). For example, in the context of political risk, an international firm may have to face the following problems: ‘a) expropriation of its assets, b) barriers to repatriation of profits, c) loss of technology, d) campaigns against foreign goods’ (Aswathappa 131). The above risks are described as macro – risks, being differentiated from micro – political risks, such as: a) ‘the kidnappings of employees, the increase of taxation or terrorism’ (Aswathappa 131). Moreover, Aswathappa (2010) notes that political risk can affect business activities ‘in different ways’ (Aswathappa 131). For example, in the context of political risk, an international firm may have to face the following problems: ‘a) expropriation of its assets, b) barriers to repatriation of profits, c) loss of technology, d) campaigns against foreign goods’ (Aswathappa 131). The above risks are described as macro – risks, being differentiated from micro – political risks, such as: a) ‘the kidnappings of employees, the increase of taxation or terrorism’ (Aswathappa 131). On the other hand, Mckellar (2010) notes that important information on the political environment of a particular country can be retrieved through the international organizations, usually non-for-profit organizations, operating within this country. In any case, political risk ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“In what Ways Can Political Risk Impact on the Operations of an Essay”, n.d.)
In what Ways Can Political Risk Impact on the Operations of an Essay. Retrieved from https://studentshare.org/business/1439469-in-what-ways-can-political-risk-impact-on-the
(In What Ways Can Political Risk Impact on the Operations of an Essay)
In What Ways Can Political Risk Impact on the Operations of an Essay. https://studentshare.org/business/1439469-in-what-ways-can-political-risk-impact-on-the.
“In What Ways Can Political Risk Impact on the Operations of an Essay”, n.d. https://studentshare.org/business/1439469-in-what-ways-can-political-risk-impact-on-the.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document
CHECK THESE SAMPLES - THEY ALSO FIT YOUR TOPIC
The aspects related to the ways of operations for a German car company in China
The report summarizes the aspects that a German car manufacturing company can face if it enters in the car market of China. It has been observed that China had faced several issues regarding exchange regime which can cause threat for a new company. The report describes the ways to deal with the exchange risk as well as the political risks the German car company can face during the operations of business.
15 Pages(3750 words)Essay
Lucozade Company International Expansion
It is known as the cradle of Islamic faith, as it is where the prophet Mohammed was born. The people in this country have different cultural believes and practices which differ from those in England. However, there is similarity in the market forces, which determine the way a product will perform in the market.
10 Pages(2500 words)Essay
Operational Risk Management of xx company
man Brothers Company began in 1850 through predecessor entities. From establishing the New York Cotton Exchange, it became the fourth largest investment bank in 1868 with a network of offices in Europe, North America, the Middle East, Latin America and the Asia Pacific region.
12 Pages(3000 words)Essay
Evalutating country risk analysis
Country Risk Analysis (CRA) has thus emerged as a measure to identify the imbalances that can arise through cross border investment. (Meldrum: 2000). Risk measures include a number of indicators which are economic as well as socio political summarised as a comprehensive CRA.
4 Pages(1000 words)Essay
MBA-International Accounting and Finance
For instance a purely domestic company and a multinational company are guided by the same set of goals. The financial managers of both the types of companies try to hasten the process of collecting receivables and lag the payments to
20 Pages(5000 words)Essay
Risk management
management of cost base, foreign exchange rate exposures, inability to obtain required price increase, geopolitical tensions and major impact of climate change. This has shown the effects of these into the company’s profitability and value generation from which threats and
13 Pages(3250 words)Essay
Risk Management in Banking
This thesis is divided into three sections, which critically analyze risk management models and the risks facing Andrew Bank Ltd. The first part covers the problems associated with using risk management models, the second part explains
9 Pages(2250 words)Essay
International financial management
Expected Utility Theory and the Modigliani-Miller theory is also taken into consideration which explains that the financial decisions of a company do not have an effect on its value. The report has also focused on the
6 Pages(1500 words)Essay
Operations Management
The main function of operations management is in providing the company with the criteria that is required for imposing by the market in which the organization operates (Slack,
11 Pages(2750 words)Essay
IT GOVERNANCE WITH RISK MANAGEMENT IMPACT ON THE GOVERNMENT SECTOR BUSINESS STRATEGY
h governance responsibility in the creation and preservation of wealth of all stakeholders, on the other hand, have defined corporate governance, as the ethical corporate practices and behavior while as Lam (2014) states that corporate governance is a system by which companies
10 Pages(2500 words)Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Let us find you another Essay on topic In what Ways Can Political Risk Impact on the Operations of an International Company for FREE!
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • Miscellaneous
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us