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  • Types of Risk: Political Risk, Legal Risk, Culture Risk, Economic Risk, Technology Risk, Other Risk

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    Dharmender Sharma
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    Political risk is any governmental action or politically motivated event that could adversely affect the long term profitability or value of firm. Legal risk relates to the protection of IPRS, Product liability and safety, Environmental law, labour laws, Contracts law, and technology risk. Technology risk is the risk of a technology pirating or being stolen by a competitor. Cultural risk is a risk of cultural and religious beliefs and attitudes.

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    Political risk is any governmental action or politically motivated event that could adversely affect the long term profitability or value of firm. Legal risk relates to the protection of IPRS, Product liability and safety, Environmental law, labour laws, Contracts law, and technology risk. Technology risk is the risk of a technology pirating or being stolen by a competitor. Cultural risk is a risk of cultural and religious beliefs and attitudes.

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    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
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    9 views7 pages

    Types of Risk: Political Risk, Legal Risk, Culture Risk, Economic Risk, Technology Risk, Other Risk

    Uploaded by

    Dharmender Sharma
    Political risk is any governmental action or politically motivated event that could adversely affect the long term profitability or value of firm. Legal risk relates to the protection of IPRS, Product liability and safety, Environmental law, labour laws, Contracts law, and technology risk. Technology risk is the risk of a technology pirating or being stolen by a competitor. Cultural risk is a risk of cultural and religious beliefs and attitudes.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 7

    types

    x x x x x x

    of risk

    political risk, legal risk, culture risk, economic risk , technology risk, other risk

    corporate face political risk when they conduct business with the outside world. Political risk is any governmental action or politically motivated event that could adversely affect the long term profitability or value of firm. (a) Macro Political Risk e.g. Barriers to repatriation of profits, Confiscation of properties, Loss of technology & other intellectual property Campaigns against foreign goods Mandatory labour legislation Civil wars Inflation Currency devaluations (b) Micro political Risk e.g. kidnapping, terrorist, threats, increased taxation, Official dishonesty MANAGING POLITICAL RISKS (1) Avoid Investment (2) Adaptation (3) Host country has no option (4) Influence local politicians- (lobbying) (5) Terrorism consultants

    LEGAL SYSTEM (1) Islamic Law (2) Common Law (3) Marxist Law (4) Civil or code law AREAS OF CONCERN FOR MNCs (a) Protection of IPRS (b) Product liability & safety (c) Computation law (d) Bribery & corruption (e) Environmental law (f) Labour laws (g) Contracts law (h) Shipping of goods (i) Advertisement& sales promotion laws

    Elements of culture: (1) LANGUAGE (2) EDUCATION (3) RELIGION (4) AESTHETIC (5) ATTITUDES (6) CUSTOMS & MANNERS IMPLECATIONS FOR IB Multi-culture Spread cross cultural literacy Cultural & competitive advantage Compatibility between strategy & culture Managing diversity

    COMPONENTS : (a) Income classification of countries Developing Countries Developed Countries (b) Economic system classification Pure market Economy Pure centrally planned Economy Mixed Economy (c) Region wise classification of countries. (d) Economic trade policies

    IMPACT OF TECHNOLOGY (a) social implication (b) economic implication (c) plant level changes Implication & MNCs MNCs E-Commerce Telecommunication Transportation Technology Transfer Markets Production Technology & MNCs

    (a)

    Huge foreign in debtness (b) Exchange rate risk (c) Entry requirements (d) Tariff, Quotas & trade barrier (e) Corruption (f) Bureaucratic practices of Govt. (g) Technological pirating (h) High cost

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