Global perspectives on risk


Global perspectives on risk

Choose one topic

1 discuss the effect that political risk can have on the overall attractiveness of a country and critically evaluate the methods that international businesses should use to manage this risk.


2 critically analyse why many international businesses will use insurance as part of their risk financing strategy and discuss a common method that they will use to purchase and manage their insurance portfolio


  1. A quote attributed to Milton Friedman(1912-2006) is:”the business of business is business”. In risk management terms, critically evaluate the dangers inherent in this quote for modern day international businesses.






The business environment has over the last century faced tremendous developments and revolutions. The issues of technological advancements, globalization and liberalization of markets have been the most focal as far as the revolution of business environment is concerned. These phenomenon have substantially influenced the competitiveness of the business environment is currently characterized by high levels of competition. In response to increased competition and activity in domestic markets, businesses are forced to diversify and expand their operations into foreign markets. This has been identified as one of the growth strategies of businesses which are aimed at ensuring business sustainability and success. Nevertheless, the internationalization or globalization of business activities has been faced by numerous challenges. In particular, political risks have been the main issue facing the expansion of business operations into overseas markets. Despite the lucrative nature of foreign markets, political risks have been identified to doom the success of businesses in foreign markets. It is worth noting that presence of political risks dooms the overall attractiveness of a country, thus chasing away potential investors. With references to the current integrated global markets, businesses are offered free entry to foreign markets. These opportunities are however doomed by the issues of political risks which jeopardizes the attractiveness and profitability of a nation in undertaking business activities.