Management Essay
Businesses operating in developing countries and emerging economies face a number of political, economic and social risks. Discuss the nature of these risks and the methods used to assess such entry risks.
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Features:
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written to a Masters Level
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essay length: 3591 words
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no bibliography included but otherwise referenced
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available in MS word
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Sample:
Businesses operating in developing countries and emerging economies face a number of political, economic and social risks. Discuss the nature of these risks and the methods used to assess such entry risks.
International trade barriers, for most, have long fallen. In developed nations, markets are becoming saturated; specific natural resources are often exhausted or non-existent and labour rates and material resources are too costly. Meanwhile, emerging economies such as China, India, or even Brazil are finally opening themselves up to the rest of the world. For businesses, this means a chance to take advantage of opportunities that are too often scarce at home. However, opportunity does not come without risks; foreign countries have different political, economic and social frameworks which all affect MNCs in different ways, especially in developing countries where socio-political and economic grounds may at times remain unstable.
International managers can do very little to prevent the difficulties they face, and have no control over events that may influence those risks. It is therefore in the interest of any international manager not only to understand the different risks they face but also to be aware of the methods used to assess such risks.
Although the question divides risks into three different categories (political, economic and social), it has nevertheless been noted that all risks have political, economical and social implications. Therefore, to avoid confusion, this discursive essay will employ Griffin & Putsay’s risk categorisation.
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Governmental risks: risks that arise out of governmental action and/or influence (including legal and regulatory frameworks…)
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Non-governmental risks: risks that arise out of non-governmental actions (terrorism, religious conflicts…)
There are a number of governmental risks that international managers have to be aware of. First, a government from a developing country may not provide political/economic and social stability. Many emerging economies may present important risks in relation to the stability of their fundamental legal and political frameworks. Some may still not have an established rule of law, so government’s role in business varies because those in control can determine policy with some degree of enforceability....
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