Political Risks And Its Impact On Performance

Enterprise Risk Management (ERM) is a series of processes used to identify risk, implement strategies to address risk, and monitor impact on the organization. Indeed, an effective ERM will consist of a corporate profile, which is a record of key risks that would hinder the organization in achieving their key objectives (Fraser & Simkins, 2010). Ideally, the risk profile is created as a tool to communicate with the Board of Directors, but may be used as a means of communication with all levels of management (Bethel, 2016). Typically, there are variations of the risk profile based upon the level of management, such as duration, types of risk, and purpose (Fraser & Simkins, 2010).

Compare and contrast macro political risk with micro political risk. Discuss policies to combat their impacts on international business activities.

Risk management is the process where individual and overall risks are understood and managed, thus optimizing success by minimizing the threats and to maximize opportunities [APM Body of Knowledge, p. 179]. All projects are inherently risky, because it performed by people and subject to the external influences or environment. Risk is something that it cannot be predicted. That is why into the company’s organization, risk management has an essential and vital part in any project whether that is in the planning procedure or to project implementation. Risks are always exists and can be translated as an opportunity to gain benefits. In addition a risk may incur serious monetary losses. The first step of risk management begins when identifies risk. These are identified through several techniques that risk management can select and use. One of the most effective techniques is brainstorming where members are attending meetings in order to gain ideas of either to identify a risk or how to overcome the arising risk. However a document review technique is also applied which is also very helpful, in this technique, documents are reviewed from prior projects which leads to a better understanding of the risks that may do occur. If a company seeks risk management capabilities, is to gaining competitive advantage, riskier businesses seek potential and higher profits.

However, companies generally adopt a methodology for overall risk assessment. Sometimes these methodologies involve the assignation of risk oversight to leaders in each area. The approach is based upon the assumption that each area knows itself best. However, this often overlooks potential issues in favor of confronting them after they develop. As the need for

Awareness- MNCs must be aware of the political risks factors present in doing business abroad and develop strategies to respond to them. Policy and control mechanisms, along within certain nations allow firms to evaluate the inherent risk of doing business there.

Good risk assessment requires an elaborate plan. A risk management plan is a project management type that helps ensure that an organization reaches desired goals in a given project (Gibson, 2010). Like every plan, caution should be taken to make sure that goals of the assessment are achievable given the best accommodation of time and cost. This calls for organization to have a risk scope. Risk scope simply identifies the boundaries of a given risk assessment. This is

Background- In its most basic sense, risk management identifies, allows assessment, and prioritizes risks that are associated and central to an individual project or organization. Risk management allows the organization to be proactive in preventing or mitigating risks, for improving certain processes within the organization, and with the hope of preventing fiscal exposure. However, in almost every organization there are risks individuals are unique and do not always perform at a high level of safety; mechanical or design failures exist, construction projects have supply or labor issues, there are uncertainties in computer or data modification, of course natural disasters, and even deliberate attacks from competitors, etc. Because this is such a common occurrence, national and even international standards have been developed in conjunction with the insurance and regulatory institutions to at least provide basic guidelines to minimize risks risk (International Organization for Standardization, 2009).

Because of rapid economic growth in XXX over the past years has increased the fear of major business failure, risk has become an overwhelmingly dominant business topic. As a result, top managers are now focusing on risk management in their companies. As each business entity struggles with its own set of needs and circumstances, the need and flexibility to address this continuously changing and volatile economic environment, would be extremely challenging and fulfilling to me.

Risk Assessment - The risk assessment is the process of evaluating threats to a business, customers and stakeholders. Threats may range from a high probability to a minimal impact to a business. Such as faulty power grid to a high impact such as a cyber-attack to natural disasters. This step is vital in examining how effective a business continuity plan will succeed if subject to a threat scenario. This analysis will provide feedback or refinement to the

The decline in favor of quantitative methods has caused cynics to suggest that risk management should involve more than just measuring risk and should include qualitative approaches. Their argument is that qualitative approaches would help managers to see how a good project can turn bad and how their firms would fare under different scenarios.2

The legal and political environment can impact business organizations in many ways. It could add a risk factor and lead to a major loss. Company should understand that the political factors have the power to change results. It can also affect government policies at local to federal level. (PESTLE Analysis, 2015)

POLITICAL AND BUSINESS RISKS Last Name 2Political and Business RisksMost corporations all over the world expand their operations into new geographicallocations in order to increase their profitability. As these companies expand into the new regionsand have high profitability, there are a number of risks

Proper survey and the complete scenario is taken into consideration about risks in the organization which enables the proper risk assessment. Potential of each threat or risk is evaluated and graded in order to reduce the impact of the risks or reduced the probability of its occurrence.

The goal of risk management is to identify and eliminate or evade potential vulnerabilities and threats that are not wanted because it creates losses. The fundamentals concepts and principals of Risk Management apply at home, at work, in the community, and at critical infrastructure locations in because there are risks that can cause losses at these places which should be identified and escaped. For instance, at home there are many vulnerabilities which should be found and ways to evade them determined, houses are vulnerable to theft and accidents like gas leaks which can cause a fire (Pfohl et al. 2010). At work is also applies because there are risks that cause losses that cannot be seen but felt, at work risk management will help mitigate risks like injuries, business losses like employee turnover losses, job losses, and losses caused by employees. The community needs risk management concepts and principals to help them make the better decision to mitigate risks like political risks. Government instability can create losses to a community when there is no sufficient public resources and insecurity. It also applies at critical infrastructure locations because accidents like a plane crash or natural calamities like flooding or earthquake can create great losses including loss of lives. These risks cause great losses, and they should be mitigated by making good risk management decisions.

1. Political risk and country risk are challenges that must be strategically considered by multinational firms. What is one real-world firm that deals with political and country risk?