Political Risk in International Business

In: Business and Management

Submitted By k20011
Words 406
Pages 2
In my perspective before any country decides to do business internationally, they must access the political risk in that country. Political stability is the biggest reason to attract foreign investment. Here are some common questions they should be asking themselves:
1. Is the government stable?
2. Is the government a democracy or a dictatorship?
3. Is power concentrated in the hands of a few?
4. What is the extent of government’s involvement in the private sector? Etc.
Before foreign investment it is important to assess if a country believes in free markets or government control in industry. The country’s view on capitalism is also a factor for business consideration. I think that stable political system builds a strong economic environment. With proper legal policies in place, a country’s economy is bound to benefit.
Bribery is an important issue in international business and unfortunately a living reality. Even though the FCPA was structured to help the U.S. companies understand what is and what is not considered bribery in a foreign land, it is not always clear what is considered a bribe. I guess perception also plays a big role. What is considered bribery by the U.S. may be considered as a gift by other countries. Countries with severe bribery conditions are known to be the ones where poverty and weak economic conditions exist. Today many companies have written and provided formal set of procedures to their employees to help them stay away from bribing anyone intentionally or unintentionally.
Like bribery, another issue in international business is the protection of intellectual property. I think no business should step into a foreign land unless they are very sure about the protection of their tangible and intangible property. I strongly criticize any company selling fake products. The U.S. has taken a global leadership role on the issue of…...

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