Question

Describe the emergence and subsequent decline of the political risk analysis industry. Discusses what political risk means for multinational firms and various ways in which firms have tried to analyze and grapple with these risks.

Answer 1

Emergence of Political Risk Analysis Industry:

1. It identify political risks and its variables.

2. It also helps to assess the importance of above variables.

3. It also helps to assess the relationship between the variables.

4. Political risk analysis also helps to reduce and ways to mitigate the risks arises due to political situations.

5. Ways and means to overcome the adverse effects of political situation is an important function of political risk analysis .

Decline of Political Risk Analysis Industry:

1.One of the reason of decline is due to exposure of risks.

2. Exposure of personnel.

3.Reduce expected profits

4. Adverseley affects market stakes of exporters and contractors.

Political Risk for multinational firms means the undue political pressure given by many political situations,not complying with the laws,regulations ,guidelines,standards etc.

Ways to grapple with the risks:

1. Not to indulge in staff conflict and line conflict.

2. Adequate training of the staffs and employees to handle situations.

3.Abide by the rules and regulations.

4. Not to engage with any sort of conflicts with the trade unions.