ZENITH International Journal of Business Economics & Management Research
Year : 2013, Volume : 3, Issue : 11
First page : ( 89) Last page : ( 98)
Online ISSN : 2249-8826.

International strategic: political risk & government relations

Dr. Gupta Abhishek

Administrative-Cum-Accounts Officer & Head of Office, Sardar Swaran Singh National Institute of Renewable Energy (Ministry of New & Renewable Energy, Govt. of India), Kapurthala (Punjab), India

Online published on 7 April, 2014.

Abstract

Firms go international to become more competitive and profitable. Unfortunately, many risks accompany internationalization. One of the biggest emerges from the political situation of the countries in which the MNC does business. MNCs must be able to assess political risk and conduct skillful negotiations. This research specifically examines what political risk is all about and how MNCs try to manage it. One major way is through effective evaluation and risk reduction. This process extends from risk identification and quantification to the formulation of appropriate responses, such as integration and protective and defensive techniques. This research also describes the process for developing productive relationships with governments and for managing alliances with international partners, many of which are influenced by home and host government relations. The specific objectives of this research are to examine how MNCs evaluate political risk; to present some common methods used for managing and reducing political risk; to discuss strategies to mitigate political risk and develop productive relations with governments; to describe challenges to and strategies for effectively managing alliances.

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Keywords

Investment, Indigenization Laws, Integrative Techniques, Political Risk, Operational Risks, Strategies, Techniques, Transfer Risks.

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