GMS 520 Chapter Notes - Chapter 2: Political Risk Insurance, X86 Instruction Listings, Counter-Terrorism
Document Summary
Different risks included: govt regulation, currency risk, political. Formal risk management using biz analytical tools would be more. Important re: political: phenomenon of ethnicity- lots of conflict from difference in ethnic groups, need to understand country"s religion/ethnic composition to anticipate instability. It"s rising in many countries long term value/profitability leaving minority to mnc. Any govt action/politically motivated event that could drastically affect. Nationalization: the forced sale of an mnc"s assets to local buyers, Expropriation: local govt seizes assets of mnc, inadequate. High risk in countries with lots of change, upheaval, violence. Macropolitical risk event: affects all foreign firms doing biz in region, Terrorism: less global expansion because talent, scared, high security. Micropolitical risk event: affects 1/few firms, more common. Aka creeping expropriation- govts gradual, subtle action against. Takes a long time to get shit done. Political risk assessment, 2 forms subsidiaries, hiring experts. Monitor issues before they become headlines to max opportunity/deal. Also need to examine impact with risks sooner.