Ten Critical Steps for Risk Managers - Essay Example

Argentina is one of the Latin American countries which have a high political risks associated with international business. These risks affect the way international business is done between Argentina and the rest of the world.According to World Bank (2001), managing political risk and other forms of risks associated with international business is something that can be very difficult for businesses. However, experts such as Thomas Cook (2012) have provided useful information regarding the ways in which international businesses can address these issues.

For a country such as Argentina, the main issue for international business people to understand is the fact that this country is not stable politically. Countries which have not matured democratically such as Argentina have more and higher political risk and it is necessary for businesses to be able to address these risks in a more serious way. The following ten steps as developed by Cook can be used to manage political risk in Argentina. The first issue to for a manager to consider is selecting a risk insurance firm which is suited to the insurance needs of the business.

According to Cook (2012), it is absolutely necessary for a manager to know that the underwriters who they choose are conversant in political risks in the country. In this regard, choosing an insurance broker in Argentina will concentrate on looking for an insurance broker who critically understands the political risks in the country not only in theory but also in practice.. In buying insurance, it is always necessary to understand the nature and extent of the risk involved (Cook, 2012). In this regard, it will be increasingly necessary to understand the political risks involved in Argentina and then look for an insurance provider who will guarantee these risks.

It will be necessary to look for an insurance provider who clearly understands these risks and who is able to look at the way in which the business can be shielded from this kind of risk. Thirdly, the manager should consider combining risk and covering them with one insurance policy. There are a number of risks associated with doing international business in Argentina and this will require combining risks when buying an insurance policy. In this regard, it will be necessary to understand the various risks which can be combined in order to make sure that the business is well protected.

For instance, apart from political risks, there are other non-political risks which must be looked at in this regard, instead of having a different policy for each risk; it could be useful to have one umbrella policy which will protect the business from all the risks. Fourth, constant communication about the contract after it has been put in place is also very important. This is because Argentina’s political environment is very volatile and therefore the nature and extent of political risks in Argentina keep changing over time.

Fifthly, constant review and update of the insurance contract is necessary because political risks can change with regard to which regime is in power and also depending on seasons such as the electioneering season. With a country which does not have a concrete public policy, the nature of the governance is purely