Chapter 3 (Political Risk) Flashcards
What is a political risk?
Political uncertainty that depicts a high probability that there will be changes in a host or home country policies that could have negative effects on a firm’s financial performance, or strategic position, or operations or competitiveness
What are some negative effects of political risk on enterprises?
Change financial performance
Change in strategic position
Change in business model
Change of firm’s competitiveness
What are types of political risks?
Ownership risks
Operational risks
Transfer risks
What is the framework for managing political risks in international business?
Political risk assessment
Adapting business model to host country
Collaborating with strategic partners
Re-configuring value chain
FDI insurance
Build relationships with policy makers
What are the main drivers of political risk?
Political system
Legal framework
Government efficiency
What are factors contributing to political stability?
Democracy
Political ideology
Internal conflict (or lack there of)
Geopolitical pressures
What is democracy?
Voice of citizen
Free fair and frequent elections
Individual freedom
Freedom of association
Economic freedom
Media freedom
Inclusive citizenship
Rule of law
Gov transparency and accountability
What is a political ideology?
Underlying political assumptions, ideas, beliefs, philosophy or principles that determine the role of the government in national governance such as:
Distribution of wealth
Business ownership
Health care
Education
Social security
What are different types of internal conflict?
Racial
Class
Terrorism
Religious
Ethnic/tribal
Political
What are geopolitical pressures?
Global political power comp
Regional conflicts
Foreign political interference
Terrorism, cybersecurity, and nuclear threat
Global pandemics and economic crisis
Climate change
What is government efficiency?
Government capability to deliver public services to its people effectively
What are the pillars of government efficiency?
Government bureaucracy
Gov transparence
Digital information tech
Human Resources capabilities
What is the framework to analyse legal risk?
Legal system
Legal efficiency and law enforcement
Competition laws
Product standards and liability
Protection of property rights
Protection of intellectual property
What are some aspects where enterprises can assess legal risks measures?
Legal efficiency
Settling dispute
Enforcement
Burden of govt regulations
Protection of intellectual property
Property rights
What is the framework to manage intellectual property rights in high-risk countries
Registration of intellectual property
Reconfigure gvc
Selective recruitment
Limiting partner to access
Discriminant pricing
Prosecuting intellectual property rights
What are indexes of the World Governance indicators?
Voice and accountability
Political stability absence of terrorism
Govt effectiveness
Regulatory quality
Rule of law
Control of corruption
What are some ethical challenges facing international business?
Cultural differences
Corruption
Child labour
Poor working condition
Human rights violations
Environmental degradation
Consumer deception
Incomplete disclosure
What are political risks associated with social media?
Voices and mobilization of masses
Dissemination of misinformation
Radicalization
Anti-democratic exploitation
What are political risks associated with blockchains?
Anonymity
Cyber crime
Cyber security
What are political risks associated with AI?
Marginalization/tribes/politics of exclusion
Displacement of workers
What are some political risks associated with 3D printing?
Crimes
Guns
What are some positive impacts of digital technologies on political systems?
Capability to monitor IPR
Greater government effectiveness
Greater government transparency
Greater political participation
Lower political campaign cost
Effective political campaigns
What are some negative impacts of digital technology on political systems?
Misinformation
Tribalism
Polarization
Foreign interference
Cyber security risks
