Political Risks Of A Country And Micro Analysis - 1283 Words

One of the first steps in managing political risks is to analyze the political environment for risks to the business. According to Luthans, the analysis of risk can be done with two types of political risk analysis, Macro and Micro Analysis. Macro Analysis is an analysis of political ideas and decisions that will impact all businesses in a country and Micro Analysis is an analysis of governmental regulations and policies that affect a specific sector of on economy or market such as the auto industry (Luthans, 2015). However, there are other risks that can be more difficult to analyze such as terrorism especially in today’s political unrest. Some major corporations have spent thousands of dollars on macro and micro analyses just to have a world event disrupt or completely destroy operations. Tata motors dealt with political battles as well as a terrorist event. In a USA Today article titled â€Å"India s Nano goes on sale† Sharon Silke reported that the Launch of w as Six weeks late after political battle over the land where the car was to be built. She also reported that terrorist attacks in November of the year prior to the Nano’s launch would affect its future success. When the Nano was first unveiled the economy was in a good state where gas prices were rising and the world economy was becoming more stable. This would improve the future for many lower income families in India allowing them to improve their socioeconomic standing which in turn would have enable moreShow MoreRelatedPolitical Risk948 Words   |  4 PagesPolitical Risk Political risk is a type of risk faced by investors, corporations, and governments. It is a risk that can be understood and managed with reasoned foresight and investment. Broadly, political risk refers to the complications businesses and governments may face as a result of what are commonly referred to as political decisions—or â€Å"any political change that alters the expected outcome and value of a given economic action by changing the probability of achieving business objectivesRead MoreManagement Plan For Risk Management810 Words   |  4 PagesRisk Management Risk management is the identification, assessment, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability and impact of unfortunate events or to maximize the realization of opportunities. Risk management’s objective is to assure uncertainty does not deflect the endeavor from the business goals. Risks can come from various sources: e.g., uncertainty in financial markets, threats from project failuresRead MoreInternational Management 7e (Deresky) - Ch.1 : Discussion and Analytical Questions1585 Words   |  7 Pagessuch as energy. 2- Discuss examples of recent macro political risk events and the effect they have or might have on a foreign subsidiary. What are micro political risk events? Give some examples and explain how they affect international business. Answer: An event that affects all foreign firms doing business in a country or region is called a macro political risk event. In many regions, terrorism poses a severe and random political risk to company personnel and assets and can obviously interruptRead MoreRR Donnelley: An Analysis of the Companys Challenges and Some Recommendations1055 Words   |  4 Pagesas his top priority (Kennedy, Robert. January 31, 2003. PP. 2). 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Capital is the result of Investment done by people the of that country and investment comes from savings of households of that country so we can say that Savings –Investment-- CapitalRead MoreThe Economic And Trade Globalization2201 Words   |  9 Pagesmarkets in other countries, which is the origin of multinational enterprises. However, since the environment of the market is different from the host country, such as natural conditions, socio-cultural, or customer needs, which is particularly difficult to deal with the situation when to enter the market of a country, it will need to face the corresponding political risk. Political risk is a type of foreign exchange risk, thence, a prerequisite of political risk and foreign exchange risk of the occurrenceRead MoreMacro and Micro Political Risk3232 Words   |  13 Pagesmacro political risk with micro political risk. Discuss policies to combat their impacts on international business activities. Strategic planning is essential prior to any individual or company deciding to engage in international business whether as direct/indirect investment or through trade. An evaluation of risks should be considered and strategies developed accordingly prior to any potential investment in a foreign country. One such risk which requires consideration is political risk i.e.