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TYPICAL RISKS IN IB (POLITICAL RISKS (How to identify? (Read the news,…
TYPICAL RISKS IN IB
POLITICAL RISKS
First and foremost economic threats (terrorism, war, sanctions, disagreements between heads of states)
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How to identify?
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Categorize (macro, micro)
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How to mitigate?
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List of backup suppliers (in case of increased tariff, trade bans, delays)
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CULTURAL RISKS
Basic norms, behaviors, traditions, verbal and nonverbal language
Types
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Social structure
- Conditional model of collaboration
- Culturally varying collaboration
- Individualist and collectivist
Typical risks
Adapt global business models to the local market (avoid one-size-fits-all, glocal
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Local business practices (economic, political, regulatory)
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Diversity management (diverse team, homogenous team)
Causes:
- Culture shock
- Spousal adjustment
- Communication barrier
- Interpersonal conflict
- Lifestyle change
- Local business practice
- Isolation
Short-term solution:
- Virtual assignment
- Cross-functional team
- Short-term business travel
- External partnering
- Redesign workplace