The following analysis will provide a discussion of political risk, relate an understanding for how it can be managed, and give specific examples of political risk that individuals involved in international business decisions might face on a regular basis. Essentially, recognizing how to manage political risk while conducting international business is an essential element that managers should be able to comprehend and understand. Without this understanding, managers will be at a disadvantage and will place themselves at risk and even in harm’ s way if they are not careful. Political landscapes businesses that operate overseas.
These landscapes must be navigated carefully and with ethics in mind. Strong core values will be essential to their success. An effective understanding of “ political risk” can be effected through an appreciation of societal organization; specifically, the means by which the rules of law, or lack thereof, define the way in which a given region might be represented. Based upon the way in which human society has developed, political systems have come to define different ethnic, linguistic, religious, or cultural boundaries; acting as a means coalescing disparate groups of individuals under a certain set of laws, regulations, expectations, and cultural norms.
The range of political cultures is expansive, to say the least. Within the current world, there are examples of countries that have liberal democracies that practice the concept of democracy; as well as nations that are completely authoritarian dictatorships in which the will of the people has little to no relevance to the way in which the political system operates. The differentials and levels of nuance that exist within the current political systems the globe force companies and decision makers within them not to form concrete understandings of political risk based upon a convenient model (Mitchell, 2011).
Instead, political risk must be unique and determinant only to the region in question at any one given time
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