International Business Assignment on Global Risk

Group No. 7 Mohit Mehndiratta Dishari Halder Ashish Dwivedi Ajay Sundar Masceranus Xavier Pavan Kanna

Also a country where income is more equally distributed tends to have longer growth cycles as well as more political stability. Cyber attacks are a huge threat to a country’s security. . ENVIRONMENTAL RISKS: The biggest environmental risks faced these days are rising greenhouse emissions. The way out is for the business community to constantly pressurize the government to return to fiscal discipline. mainly because of human greed. leading to loss for businessmen.a high crime rate and a huge amount of foreign debt to support the economy. Also in many South Asian countries population growth has been unsustainable. Overpopulation leads to two things. It is risky to do business in a country that has a rising fiscal deficit. So a businessman will always prefer a Vietnam to an Iran. but clamouring for resources does not help in the long time. The government can always change the very policies that had attracted investors and businessmen to counter fiscal deficit and sometimes they are applied retrospectively. severe income disparity and other factors like systemic financial failure and volatility in prices. Before any kind of investment in a country a businessman should evaluate whether the government is serious about tackling issues like cyber attacks. Which is why organizations prefer countries which have a stable government and where they are assured that their investments will translate into profits and they will have a decent return on asset. There has been a failure in climate change negotiations with key emitters refusing to commit to a legally binding agreement before 2020. failure of climate change adaption and mismanaged urbanization. The root of the failure has been the perception that solving climate change is about sacrificing economic development. A country having huge foreign debt can plunge in to a debt crisis anytime thus leading to downgrading of bonds and other credit facilities TECHNOLOGICAL RISKS: Cyber attacks and critical systems failure are the key risks. Also a population that does not get the basic facilities cannot contribute much to growth.made risks.All the major risks can be divided into five main categories ECONOMIC RISKS: The major economic risks faced by a country and its people are fiscal imbalances. selfishness and laxity on the part of government officials. Frequent disturbances in a nation like terrorist attacks discourage businessmen from investing in that country. ALL MAJOR RISKS GEOPOLITICAL RISKS: These are man. both of which is not good for business. SOCIETAL RISKS: Because of mismatch between resources and population there has been severe food and water crisis. because there are no fixed policies in place. While a country would like to reap the benefits of demographic dividends. because hackers can also bring down company website and attack their security.

Fig : Triple bottom line approach The triple bottom line (abbreviated as TBL or 3BL. Board of Directors) . With the ratification of the United Nations and ICLEI TBL standard for urban and community accounting in early 2007. a commitment to corporate social responsibility (CSR) implies a commitment to some form of TBL reporting. ecological.g.Solutions: Model 1 The societal. In the private sector. For reporting their efforts companies may demonstrate their commitment to CSR through the following:  Top-level involvement (CEO. Similar UN standards apply to natural capital and human capital measurement to assist in measurements required by TBL. e. and social. planet. The approach suggests to keep people and planet before the profit motive of the business. economic and environmental risks can be reduced by following a triple bottom line approach given by CK Prahlad. profit or the three pillars) captures an expanded spectrum of values and criteria for measuring organizational (and societal) success: economic. this became the dominant approach to public sector full cost accounting. the EcoBudget standard for reporting ecological footprint. This is distinct from the more limited changes required to deal only with ecological issues. and also known as people.

For Ex: G. Businesses can collaborate together and help each other/share resources in areas of CSR expertise such as in India Azim Premji Foundation(APF) is working on eradicating illiteracy thus it can help Reliance Foundation or Tata group who has presence in mainly healthcare.E and Pepsico for finding new business and increasing market share. Thus each major business should adopt a region and an area of expertise as the governments alone are incapable of removing all the evils. This collaboration would help due to economies of scale and availability expertise. Sustainability is the buzz word here. Business and NGOs can collaborate on the remedies mentioned below. Model 2 NGO Business Government Collaboration between Government. As developing countries such as India and China have majority of the world population. Thus APF can help Tata group in education area and vice versa.     Policy Investments Programs Staffing resources Signatories to voluntary standards Principles (UN Global Compact-Ceres Principles)  Reporting (Global Reporting Initiative) Some companies have already started following this approach wherever possible. Thus Government. these ideas have to be implemented in these two countries ASAP. Business and NGOs. .

One example of an innovative market solution is Facebook’s “bug bounty” initiative.  The goal should be finding ways for well-intentioned individuals to identify those faults and deploy remedies to end-users before would-be cyber criminals can discover and exploit them. .  Care should also be taken that businesses do not influence the policymakers because regulations are generally costly to abide by and result in profit reduction. These frameworks need to be adopted by each country along with modifications to suit their environments in the best possible manner.  An active participation is a must from all small regulatory bodies across the world to discuss the various threats arising from emerging technologies and frame a common regulatory system that is capable of handling any unforeseen risk and also encourage development at the same time.31 Facebook’s strategy is controversial among software developers and firms who see it as legitimizing efforts to abuse proprietary software. Timely revision of these rules will ensure the much needed flexibility that would lead to an efficient global governance system. which allows individuals who hack into Facebook’s systems to report how they did so to the company and receive a reward.  Correcting information asymmetries between vendors of online securities and firms should be at the centre of policies to improve global cyber security and to ensure an efficient market. It would involve the prediction of various risks emerging from the rise in innovations in technology and defining safeguards flexible enough to be continually tightened or adapted in response to emerging risks and opportunities. it would require that representatives from across the world frequently meet to discuss the changing trends and share individual knowledge of developments so that a dynamic system of changing regulations is set up in order to achieve the right balance between flexibility and risk mitigation. In India. Also.Remedies  Rural Development  Strict Population controls  Creation of Other jobs  Chart out long term fiscal plans  Equitable job distribution  The approach of anticipatory governance would be the most appropriate while formulating global regulatory frameworks.  Innovative multi-stakeholder collaboration between organizations and individuals will be required to tip the balance towards investment in creating systemic resilience. TREM 3A emission norms were framed 2 yrs after the world accepted these norms due to political influence from the bigger business houses in the country.

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