In what Ways Can Political Risk Impact on the Operations of an Essay

In what Ways rear Political Risk Impact on the Operations of an International Company - Essay ExampleAs in its context, policy-making insecurity is described as the risk of issue of assets, earning power or managerial control due to governmentally based events or actions by host governments (Daft 116). From a similar view, Sharan (2011) notes that governmental risk is a term used in order to plant the response of international companies to semipolitical scenarios developed in host countries (Sharan 229). The aspects of political risk that international companies ar likely to face are presented and analyzed in this paper. Reference is made to a specific company, Shell, which is well established in the international 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 area, 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 discover business operations in all its industries. abroad 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 international firms operating in these countries. Moreover, Aswathappa (2010) notes that political risk can affect business activities in different ship canal (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 large risks, being differentiated from micro political risks, such as a) the kidnappings of employees, the increase of taxation or act of 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 pa rticular country can be retrieved through the international organizations, usually non-for-profit organizations, operating within this country. In any case, political risk