Political Risks And Its Effects On Local Activity - 831 Words

Political risks: All companies doing business domestically or internationally are affected by political issues and risks- the likelihood that a society will undergo political changes that negatively affect local activity. In many different ways, politics are a huge factor for the willing of two sides to cooperate and trust one another. (International business book) When comes to technology transfer, companies have to take the risks of politics under consideration before sharing information which can harm them in the future. There are four main risks that have to be observed. The first risk refers to the local conflicts in one of the participating countries. Conflicts can discourage companies to invest in a nation with no local security consistency from the fear of inability to manufacture, regulation changes, recruiting talented personal or obtaining different kinds of materials, equipment and information (book 2). Conflicted countries can arise resentment to the government by the people who will attempt to change the leadership of a country. The conflicts do not apply only on government resemblance but also on disputes among ethnic, religious or racial groups within a country (book3). There are many examples for economies that who lost their stability according to these differences. In 2014, Egypt s persistent political unrest has held back necessary business environment reforms in areas, such as infrastructure, labor market and tax policy. Also, the risk of crime andShow MoreRelatedThe Legal And Poli tical Environment701 Words   |  3 PagesDescription The definition of legal and political environmental base on business dictionary is government actions which affects the operations of a company or business. These actions may be on local, regional, national or international level. (BusinessDictionary.com, 2015) The legal and political environment can impact business organizations in many ways. 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