INTERNATIONAL BUSINESS AND

TRADE

What is International business

environment?

The international business What is political risk

environment is the overall assessment? How do MNCs
manage political risks?
operating environment of a

business, or it is made up of

almost everything that a Political Risk Assessment is essential

business needs to function. It is in international business. It is

important to work in the overseeing the potential risks and

damages that MNCs might sustain

business environment as it
if the host government or the
poses a lot of opportunities to
country where the business
your business. The international
operates makes significant changes
business environment can be
in rules and policies. This is
classified into sub- important to know the degree of

components, and these are risk a business can assume and

political, legal, economic, accept when it comes to political

factors.
technological, cultural, and

competitive environments.
According to what I have read up,

aside from risk analysis, some MNCs

manage these types of risks by

buying political insurance and

guarantees; or making a

consultation with the host

government and political leaders.

Political Risk Insurance can be used

to protect the holdings of investors

and lenders of a company against

the default arising from political

events.
What is legal environment?
Why are there different legal
On the other hand, political risk
environment per country?
guarantees are assurances given to

lenders, it covers the full amount of

The legal environment debt owed to creditors if the debt

encompasses the laws, policies, default is inflicted by risk specified

rules, and regulations, public under guarantee.

orders passed and imposed by

authoritative bodies. Everyone Consultation with government and

needs to be aware of the legal leaders is also a great way to

manage political risks as these

environment of a country they
enable them to have insight on
wish to operate in since their
plans of the host government,
function will depend on this.
policy changes, new objectives that
Every country has a different
might affect their operations.
legal environment because every

country has the freedom to make

laws and legislation as long as it

is just and equitable. Differences

in the legal environment of the

countries are caused by different

factors. The laws are made in the

protection of their subordinates,

How are international business
and each country has a different disputes resolved?
way to attain it.

The most common procedure to

resolve disputes is to sit it over

and make negotiations with each

other and compromise. However,

if the dispute still subsists after

repeated discussions, the

situation can be brought to the

hands of the responsible

authority, such as the World

Trade Organisation. There will be

a hearing of issues, with panels

who will make verdicts