How important is managing political risk in the international business context?
ABSTRACT How important is managing political risk in the international business context? Due to the global context in which business is conducted today, political risk along with financial and economical risk is relevant in any decision making of starting a business or investing overseas. However I will focus mainly in political risk by identifying the ideas and major key points that literature has. Next I will analyse and compare the key issues found in the literature according to the idea of managing political risk and finally I will concluded by explaining the diverse forms of managing political risk according to the type of investment or entrepreneurship. INTRODUCTION Political Risk is undoubtedly one of the key factors analyse by any company when starting business or investing overseas and jointly with economic and financial risk it creates what is known as country risk. "Country risk analysis rests on the fundamental premise that growing imbalances in economic, social, or political factors increase the risk of a shortfall in the expected return on an investment. Imbalances in a specific risk factor map to one or more risk categories." (Meldrum, 2000.) One of the risk categories is: political risk that "refers to the possibility that political decisions or events in a country will affect the business climate in such a way that investors will lose money or not make as
Political Implication of Globalization.
Political Implication of Globalization Prepared by Chehade Kanaan Prepared to Dr. Hratch Hadjetian Monday, September 08, 2003 Globalization is hard to define from one perspective so I would like to have the point of view of: the technological, the political, the cultural, the economic, and the social. Technological terms: the new communications technology and the information revolution; innovations which do not simply remain at the level of communication in the narrow sense, but also have their impact on industrial production and organization, and on the marketing of goods. In discussions of globalization at the political level, one question has risen: that of the nation-state. Is it over, or does it still have a vital role to play? Should it be understood as merely one pressure among many on national governments? But behind these debates, I believe we are actually describing the subordination of the other nation-states to American power, either through consent and collaboration, or by the use of brute force and economic threat. There is a new version of what used to be called imperialism. The standardization of world culture, with local popular or traditional forms driven out or dumped down to make way for American television, American music, food, clothes and films, has been seen by many as the very heart of globalization. At a deeper level, the anxiety becomes a
Development Profile of Bolivia
Development Profile of Bolivia University of Westminster Economics of Development Module Leader: Karen Kufuor Date: April 11th, 2005 Author: Patricia Fabro 04207467 Email: [email protected] Address: 79, Fitzjohns Avenue NW36PA Hampstead, London Word count: 2925 Contents: Section A............................................................................................ p. 3 . Short summary.....................................................................................p. 3 2. Income level in relation to other developing and developed countries...,,................p. 3 3. Economic structure and economic performance..............................................p. 5 Section B International trade / foreign direct investment and development........p. 6 . The New Economic Policy (NEP).............................................................p. 6 2. Trade...............................................................................................p. 7 2.1. Memberships of organisations...............................................................p. 7 2.2. Trade balance.................................................................................. p. 7 2.3. Traded goods and trading partners.......................................................... p. 9 3. Foreign direct investments
Governments role for the solution of financial crisis in several countries of the world
Kamran Maqbool Malkani Introduction to Economics COURSEWORK ASSESSMENT, SUMMER 2010. Government's role for the solution of financial crisis in several countries of the world In previous paragraphs, we presented an overview of several economic crisis, their reasons of occurrence along with some background. Now, we look at the questions how to solve this problem? Is there any general solution to overcome financial crisis or not? Since UK is still in some crises and facing some serious financial issues, it is difficult to say that government have proposed and implemented any strong solutions to cope with this issue. In view of this, firstly we discuss about the policies, strategies and solutions proposed and implemented by some other countries of the world, which had similar problem/issue in present or past. Then, we look at some of the feasible solutions to overcome this problem in UK. Let's start with United States of America (USA). According to International Socialist Review (ISR Issue-64, March-April 2009), the Federal Reserve adopted some policies, such as lower increased loans to banks and short-term interest rates, to tackle the issue of financial crisis. However, they didn't get substantial success to achieve their goals. As a consequence, Federal Reserve introduced some new and non-traditional policies. For example first time in the history they extended loans to
The contemporary global food system provides northern consumers with unprecedented choice in the supermarket and a diet adapted to today's lifestyle. So what are the grounds for criticising it?
The contemporary global food system provides northern consumers with unprecedented choice in the supermarket and a diet adapted to today's lifestyle. So what are the grounds for criticising it? Anti-globalisation protests from Uruguay to Seattle, widespread concern for the environment, almost daily news items on food-related health issues and the plight of the developing world, coupled with the multitude of authors who have published volumes critiquing the global food system suggest that there may be valid grounds for criticising the food system in existence in the world today. The issues covered range from matters relating the individual such as deteriorating health standards and shifts in cultural norms to global issues such as large scale environmental degradation and the ever-increasing gap between the rich and the poor. Today's consumers live a life whereby there is a seemingly wide choice of food items on supermarket shelves at their fingertips; literally, with the progress made in internet shopping. The following document shall attempt to explore the different sources of this criticism in an attempt to provide a justification for the oppositions to the contemporary food system. A brief overview of lifestyles in the industrialised countries and history of the global food system in the periods that have seen the most rapid changes; post World War II, provide a platform
The erosion of trade union power since 1979
The erosion of trade union power since 1979 Trade unions in Britain have existed for over two hundred years. In the early 19th century, trade unions were outlawed for being anti-competitive but by the early 20th century there were two million trade union members and this rose to a peak of over thirteen million in 1979. However, in the 1980s there was a sharp fall in the number of trade union members. There are a number of possible explanations for this radical change in trade union membership in the 1980s but I feel that there are three main reasons. Firstly, the recession of 1980-82 led to an increase in unemployment of nearly two million and the unemployed tend to let their trade union membership lapse. It is interesting to note, however, that the rise in employment in the late 1980s did not lead to a corresponding rise in trade union membership. Secondly, the 1980s saw a radical restructuring of British industry as employment in manufacturing, a sector which was very highly unionised, fell significantly. The new jobs that were created tended to be in the service sector of the economy, which is traditionally far less unionised than manufacturing. Thirdly, the 1980s was a decade in which the government showed a marked hostility to trade unions. This affected the willingness of workers to join unions and increased the confidence of those employers attempting to reduce or
What have been the sources of Korean economic growth and how would you explain the recent crisis of the Korean economy?
Rajiv Sheth What have been the sources of Korean economic growth and how would you explain the recent crisis of the Korean economy? The Collins Dictionary of economics defines economic growth as the growth of real output over time. Growth is desirable as it implies that households will consume more private goods and services, therefore also improve the standard of living of that particular country. In order to achieve economic growth three factor inputs are necessary to increase the 'supply side' of an economy: an increase of resources e.g. labour and capital, an increase of efficiency and productivity of all resources employed and technological advancement. It is my intention to examine the specific sources that have aided the rapid growth of South Korea and discuss of how the process of rapid industrialisation and growth had lead to the fall of the 'Asian Miracle'. It is evident that the state has played a major role in the development of South Korea. This level of control and guidance is evident from the industrial polices implemented throughout the 1960's till the 1990's, to the methods the state employed to disciple businesses and creation of the Chaebol (large conglomerates). The industrial policies were implemented and adapted during three different stages. The first was during the 1960's and 1970's where the six key industries were developed, hence the increase
Career path sysrems - Motorola provides education assistance, but does not have a plan for using the new talents of employees, particularly non-engineers to the benefit of the company and the individual.
Career Path for Everyone Career "Web" Proposal Author: Jennifer R. Jensen January 9, 2004 Issue: Motorola provides education assistance, but does not have a plan for using the new talents of employees, particularly non-engineers to the benefit of the company and the individual. Background: Motorola's current career path system only addresses the needs of employees who fall into specific groups, and doesn't allow for moving from one type of job classification to another, therefore, Motorola severely limits the potential of the very people who are more inclined to take advantage of tuition reimbursement programs (hourly, non-union employees) such as the one Motorola has. It is in the best interest of the company to support the career paths (wherever those might lead an individual) of people for whom they are paying educational costs. An education that might cost tens of thousands of dollars ought to be an investment in the future of the person that receives it. While Motorola has instituted a policy of requiring individuals to repay Motorola, if they leave the company within one year of the completion of a reimbursed course, that may not be a sufficient deterrent to salvage the investment. After all, investing in an education is more than a money issue. It involves time and energy, and in reality should reap far more than just a dollar amount. If Motorola is
The Economic Consequences of September 11th
The Economic Consequences of September 11th On September 11th 2001 two aircraft were hijacked by terrorists and flown into the towers of the World Trade Center, New York. The towers collapsed and thousands of people were killed. Additional to the tragic loss of life, economic consequences were felt by the micro-economy of Lower Manhattan New York, the US economy, and the global economy as a whole. "More than 700 businesses located in the World Trade Center complex were either destroyed, or sustained extensive damage,"1 causing the loss of around 30% of Lower Manhattan's office space.2 Industries occupying this space, mainly financial services and retail, were directly affected.3 As a result of the attack, "from September 11th through to the end of year, New York financial services will account for $4.2billion in losses of economic output."4 Consumer demand in the local economy weakened dramatically whilst people grieved. "The Fiscal Policy Institute assumed a 10% reduction in consumer spending for one month for non-essential items."5 "Destroyed was half a million square feet of retail."6 Many businesses occupying this space were small, which tend to be under-insured, making resurrection unlikely.7 Also affected were local tourism and non-profit organisations. Many non-profit organisations are reliant on government support.8 With the government and other large
The UK and the single currency.
The UK and the single currency The single currency, the Euro, was created in January 1999. It replaced the ECU (European currency unit), a basket of European currencies, on a one for one basis. Each of the member countries adopted fixed conversion rates between the Euro and their own currencies. In the Maastricht Treaty it was foreseen that the single currency would be called the ECU, however it was decided at the (Dec 1995) Madrid summit that it would be named the Euro. To join the Euro each country must meet fully the 'convergence criteria'. The Euro notes and coins were introduced in January 2992 to all 11-member countries and in July all local currencies were withdrawn from circulation. One of the four European Union countries that decided to 'opt out' of joining the Euro, was the UK. Remarkable for the past twenty years prior to 1999, the UK owned 28.9 per cent, on average, of all foreign investment but with the launch of the Euro that figure has decreased to 16.7% in 2001. Now the British government will announce in parliament on the 9th of June whether or not the UK should join. The essay will be divided into several parts the first is about the objectives; the second is the literature reviews. The third part is the research questions I have formulated and the methodology and methods of data collection. Further analysis finishing off with the conclusion. The