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Political Risk12

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POLITICAL AND LEGAL ENVIRONMENT OF BUSINESS Commercial Risk Cross-Cultural Risk Risks In International Business Currency Risk Country Risk COUNTRY(POLITICAL) RISK Exposure to potential loss or adverse effects on company operations and profitability caused by developments in a country’s political or legal environments. It could be due to :      Govt. intervention, red tape, corruption Lack of legal safeguards for intellectual property rights Legislation unfavourable to foreign firms
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  POLITICALANDLEGALENVIRONMENTOFBUSINESS  RisksInInternationalBusiness CurrencyRiskCommercialRiskCross-CulturalRiskCountryRisk  COUNTRY(POLITICAL) RISKExposure to potential loss or adverse effects on company operations and  profitability caused by developments in a country’s political or legal environments. It could be due to :  Govt. intervention, red tape, corruption  Lack of legal safeguards for intellectual property rights  Legislation unfavourable to foreign firms  Economic failures and mismanagement  Social and political unrest and instability  Criteria for measurement of risk i.e. indicators of a riskysituation:  Government debt  Fiscal and monetary policy  Political stability  Corruption index
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