Political Risk Analysis

1152 Words5 Pages
The supporting evidence given by the author about the political risks is political instability and uncertainty. It is relevance because political risks may arise from the changes in governments which bring the changes in policy, interest rates and regulations that can prove harmful to foreign business and investment. Besides, political risks may be caused by actions of legitimate government like control on prices, currency, outputs and activities. It may also result from incidents which are outside of government controls, for example war, terrorism, labor strikes, revolution and others.
In addition, another supporting evidence stated by the author about the political risks in the article is an increasingly trend towards economic nationalism
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It is relevance because there is a growing concern issues about the risk in the international business of worker exploitation or forced labor and supply chain complexity. Therefore, to manage supply chain complexity and to protect against the immoral conduct in the supply chain, it needs a transparency with the correct processes taken in place.
In addition, there are some steps to ensure ethics in the supply chain. Firstly, it has to make sure all the suppliers complete the questionnaires of corporate social responsibility as a part of pre-qualification. The purpose of doing this is to help buyer organizations determine the weak points and remove any high-risk suppliers from the process. Besides, another significant tool to make sure ethics run throughout supply network is supply chain mapping. The businesses can obtain a better understanding of what is occurrence and where, by sending automated requests for information via the supply chain. Next, auditing can also ensure supply chain ethics as it is the physical verification of a company's
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It is relevance because there are some climate change risks that will affect the international business. First is the frequent extreme weather which will increase the insurance costs, disruption of power and water and may cause damage to the properties or resources. It will also cause customers unable to get in touch with or visit the business, suppliers incapable to deliver goods and services and the businesses will indirectly facing business losses.
Next, climate change may cause less demand for some goods and services in the business. For example, the demand for cold weather products like heating oil might drop if the global temperature increases. Not only that, it is also difficult to recruit and retain the staff if the business itself is not sustainable due to the environmental issues. In addition, climate change might cause global impacts. This is because if the climate change events happened in a certain country, the suppliers may not be able to deliver goods or services and the international customers may be persuaded to buy locally. This will cause more challenges for international
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