Exam 10: Managing Political Risk, Government Relations, and Alliances

Policy and control mechanisms,along with awareness of the historical treatment of multinational companies (MNCs)within certain nations,allow firms to evaluate the inherent risk of doing business in those countries.

Broadly,_____ strategies may include leveraging bilateral,regional,and international trade and investment agreements,drawing on bilateral and multilateral financial support,and using project finance structures to separate project exposure from overall firm risk.

When host governments do not require alliances as a condition for entry,many multinational companies:

Not all MNCs are confident about international investment in countries with _____.

Explain and give examples of the three basic categories of political risks.

Identify a true statement about protective strategies for responding to political risks.

In the context of the special nature of foreign direct investment (FDI),patterns of ownership relate to whether businesses are wholly or partially owned.

Identify a true statement about classic terrorism.

Foreign ownership limitations,pressure for local participation,confiscation,expropriation,and abrogation of property rights are examples of _____.

In their attempts to forestall harm in risky venues,multinational companies must thoroughly evaluate the political environment,install modern security systems,compile a crisis handbook,and _____.

In recent years,_____ risk analysis has become of increasing concern to multinational companies because of the growing number of countries that are finding their economies in trouble as in Southeast Asia or,even worse,unable to make the transition to a market-driven economy.

Laws that require that nations hold a majority interest in the operation are known as _____.

Explain relative bargaining power analysis.

_____ risks stem from government policies that limit the transfer of capital,payments,production,people,and technology in or out of a country.

Comprehensive political strategies are most important in stable policy environments.

Which of the following cultural differences tends to be more disruptive for international joint ventures than the others?

Which of the following criteria involves maximum political risk?

Firms with technology that is not available to the government should the firm be taken over have higher risk than those with technology that is easily acquired.

The seizure of businesses by a host country with little,if any,compensation to the owners is referred to as _____.

Benefits of proactive political strategies include all of the following except _____.