Chapter 1
4. 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.
5. What means can managers use to assess political risk? What do you think is there lative effectiveness of these different methods? At the time you are reading this,what countries or areas do you feel have political risk sufficient to discourage you from doing business there?
6. Can political risk be “managed”? If so, what methods can be used to manage such risk, and how effective are they? Discuss the lengths to which you would go to manage political risk relative to the kinds of returns you would
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Chapter 5
1. Discuss the stages in the negotiation process and how culturally-based valuesystems influence these stages. Specifically, address the following: * Explain the role and relative importance of relationship-building in different countries. * Discuss the various styles and tactics that can be involved in exchanging task-related information. * Describe differences in culturally- based styles of persuasion. * Discuss the kinds of concession strategies a negotiator might anticipate in various countries.
2. Discuss the relative use of nonverbal behaviors, such as silent periods, interruptions, facial gazing, and touching, by people from various cultural backgrounds. How does this behavior affect the negotiation process in a cross-cultural context?
4. What are some of the differences in risk tolerance around the world? What is the role of risk propensity in the decision- making process?
5. Explain how objective versus subjective perspectives influences the decision-making process. What role do you think this variable has played in all the negotiations conducted and decisions made by Iraq and the United Nations?
6. Explain differences in culturally- based value systems relative to the amount of control a person feels he or she has over future outcomes. How does this belief influence the decision- making process?
Chapter 6
3. Discuss the ways in which managers arrive at new strategic directions— formaland informal.
Explain and describe what parts of the interaction employed effective listening and speaking in the negotiation.
Negotiation and Conflict Application Paper I immigrated to the United States 15 years ago in pursuit of higher education and a successful career. I discovered that I had to significantly readjust the habits engrained in me from childhood through interacting with new people and dealing with conflicts. My traditional and conservative upbringing in India provided a sheltered environment and programmed me into listening and obeying elders and avoiding conflict at all costs. It was my belief that any conflict big or small with the close ones would cause a strain in the relationships. Thus, I often avoided conflicts and accommodated the wishes of others at the cost of my own. I considered this
The political risk of investing in developed countries is roughly comparable with the risks of investing in the developing countries.
However, the investment was not without risks. There are four types of risks in international business called cross-culture risk, country risk, currency risk and commercial risk. Cross-cultural risk refers to a situation or event where a cultural miscommunication puts some human value at stake. Country risk describes the potentially adverse effects on company operations and profitability holes by developments in the political, legal, and economic environment in a foreign country. Currency risk is the risk of adverse unexpected fluctuations in exchange rates. Commercial risk refers to potential loss or failure from poorly developed or executed business strategies, tactics, or procedures (Boter & Wincent, 2010). Investment in Rulmenti Grei, Timken might face the salient risks of political and economic instability. Romania’s economic growth was slower, inflation was higher, and the labor force was more volatile. Furthermore, there might be a risk of re-nationalization. It is said that economic risk analysis tells corporate leaders the ability of a particular country to pay its debt while political risk analysis tells them whether that country will pay its debt. Political risk measures the stability of individual countries through the
It is a complex social process which already becomes part and parcel of our society.
4. What is the current political system in the country? Have some major political changes taken place in the recently which has made a dramatic impact on the nation’s economy? Does the current political system help or hinder the economic development in that country? Do you foresee any political system changes in the future?
"Political risk has many guises war, expropriation, currency devaluation but for companies doing business abroad, these risks don't begin to give a complete picture of potential threats to earnings" (Protests in Middle East, North Africa spur look at corporate risk disclosures globally, 2011, Westlaw Business). For companies in the Middle East, the recent Arab Spring and a series of regime changes are causes of concern because they "could lead to civil wars; regime changes resulting in governments that are hostile to the US and/or Israel" (Protests, 2011, Westlaw). Middle Eastern volatility can also cause unstable crude oil prices which, although significant for the entire world economy, would have a particularly negative impact on the region. In terms of securing investment capital, "capital market reassessment of risk" can make necessary funds scarcer to find (Protests, 2011, Westlaw). For companies wishing to build a base of customers in the area, economic and political instability can result in a sharp downturn in demand and can also threaten supplies of essential raw goods.
Political risk is anything that has a direct correlation with the government or political setup of a country. For example political risk can be expressed through political stability, currency inconvertibility, changes in taxation, corruption, and a weak legal system for investor protection. In recent years the political stability of Chile has not been favorable. Only 24% of Chileans support their politicians (EIU, 1). Chile was always considered one of the least corrupt of Latin American countries, however, recently there as been some allegations of corruption. In February 2015, Sebastian Davalos, the president’s son, had been accused of using his authority to make profitable land deals. He had acquired $10million loan from the second largest Chilean bank for a small property company, Caval, which is half-owned by his wife. The company later bought rural land and re-zoned it to create urban development. This made the company $5 million in profit (Roberts, 1). In spite of these issues,
This paper is focused on main risk factors in Iran. The key point for this study is to explain current Iranian situation with analyze the main microelements factors such as broader risk, religious risk, political risk, economical risk, education risk and finally culture and language risk. At the end, this paper will provide a recommendation to all investors and companies CEOs, to have better overview and then as a result better business in the Iranian market.
Identify and explain the degree of exposure of your case company to international economic conditions and political risk.
With the influence of political risks on the investment and development of multinational companies, the studies of political risks have attracted many scholars and researchers to discuss and analyses. This also triggered a debate about whether or not companies could protect themselves from political risks. Therefore, by looking at definitions and types of political risks, as well as reasons of companies’ overseas expansions, this essay attempts to argue that although companies may be able to protect themselves from some political risks, there are still some political
Figure (1) shows that indicators of political risk have had noticeable changes especially after 25th of January revolution except for government effectiveness and control of corruption indicators which stayed at levels 0.5 and 0.33 respectively during the considered period. The following points summarize the performance of political risks’ sub-indicators as a response to political changes in Egypt. An indicator with points near to 1 indicates a relatively very low risk indicator, while an indicator with points near to 0 indicates a relatively very high risk indicator.
2. Several types of risk are present in the American economy. For each of the following, identify the type of risk that is present. Explain your answer.
The dependent variable is the political risk. It provides an overview of the political stability in a particular country. The scale is designed to show the greatest value to the lowest risk and the lowest value of the highest risk. Economic, demographic, and geographic indicators are also included in the econometric specifications being control variables thus ensuring the analysis affecting the political risk. The political risk
Figure (1) shows that indicators of political risk have had noticeable changes especially after 25th of January revolution except for government effectiveness and control of corruption indicators which stayed at levels 0.5 and 0.33 respectively during the considered period. The following points summarize the performance of political risks’ sub-indicators as a response to political changes in Egypt. An indicator with points near to 1 indicates a relatively very low risk indicator, while an indicator with points near to 0 indicates a relatively very high risk indicator.