International Studies and Diplomacy: Assessing the Political Risks of Global Strategy and Implementation in a Selected Global Market, Research Paper Example

Problem Definition

In the context of Iraqi war, the risks of more terrorist attacks on the businesses together with some other organizations would probably remain on the agenda for quite a long time. Consequently, business managers have been attempting to re-state their risk assessments strategies within the extensive and larger political context than they encompassed previously.

A short review of the security environment that prevails across the globe shows that economic factors appear much larger than exclusively politically-motivated violence. However, the increase in transnational crime and trafficking everything from the arms to humans are the symptoms of what most analysts now consider as the downside of globalization.

Opening global doors to the global trade, financial transfers as well as the movement of individuals who have not only worked in increasing the global business opportunities and magnificence, but also to challenge the rules of law and the trust on which the international diplomacy together with trading relations have conventionally been based.

Justification for Problem Definition

There are many insinuations that arise from this. The first one being the boundaries of what may have been believed as locally-based terrorism or resistance can migrate with an alarming speed through networks that are already established for the type of criminal activity cited above. Secondly, the effects of trans-national crime on the markets and supply chains can’t be disregarded only because the threat of terrorism appears to be more immediate or abrupt.

Terrorism can essentially strike anywhere at anytime, though the fact is that it does not. The problem is that when it actually does, far more than the immediate victims get affected, thus provoking the prolonged shock waves, trepidation and failures of confidence hard to allay through simple reassurances.

However, for the business world, we find that the most immediate effect has been felt in increasing insurance premiums together with the dusting off of text books on the operational risk management that only a quarter of the organizations had put in place had before the 9/11 incidence. In brushing up on the direct security measures, developments have definitely been made over the past eighteen months (Preston, 2006). For investor morale and self-confidence, the fall-out from Enron, the WorldCom together with the Anderson effect on communal accountability have compounded the pre-existing insecurities.

Alternative Courses of Action

To decide how large or wide a scope to focus on, it is clear that the basis and causes of political risks are nearly completely beyond the control of single organizations. If only the businesses operate directly in unsteady environments, they will have to monitor and deal with local political sensitivities, not least due to the damaging effects to the status of being considered to be unsuccessful in the corporate social responsibilities.

Nonetheless, in this respect, it should be reflected on the arguments or Mary Robinson, the former United Nations High Commissioner for Human Rights regarding the role that business has to and could be playing in protecting the human rights. Her suggestions are not just based on the higher expectations of the corporate social responsibility, but on the increasing public views that businesses can never again claim to be incapable and ineffective in the shaping of the business environments, that is, both political and physical under which the operate.

What can actually be done at the HQ level in dealing with these more immediate sensitivities is the concentration of more positive efforts on the establishment of a two-way communications with the pertinent public organizations. However, an organization thinking positively instead of responsively about the type of matters that may affect their businesses is well equipped in deciding for itself if they have to be involved in the current strategic reviews. This implies establishing continued relations with the officials in the government departments allowing for the expression of the kind of business concerns that the public officials must be aware of.

This type of relationship is now well-established already in the global corporate with the long-established public affairs departments. The new environment suggests that when planning the strategies for where they should be in about three to four years’ time, smaller, locally and nationally-based organizations will also have to begin thinking in more international or global terms.

Being radical about the risks on the perspective has the advantage of equipping the strategic planners with the idea of where within the government or the international system they need to put more weight or seek help when things start heating up. The point actually is starting the process earlier or before time, instead of seeking to influence the public policy late during the day.

Review

The corporate planners should perfect their external political antennae in order to pick up on the trends that they may earlier be thought of as too far away or even too far down the line to be more effective on their immediate business climate. In turn, diplomats will be forced to fine-tune their radars to the wider market threats that are posed by the matters that they may conventionally imagined in principally political terms.

Moreover, until recently, threat assessments ion the global affairs were mainly focused on the potential for inconsistency between states, and not within them. Since the World War came to an end, we find that it has become clearer that some more conflicts come up in the gaps whereby a state system seems to fall.

The regulation of world self-evidently is falling outside the dispatch of most pushed corporate planners. Whether in operation globally or completely locally, the business sector can never again be in a position of ignoring the down-stream impacts of global politics on the market developments.

Management of the psychological insecurity factors of insecurity shaping the motivation and morale of the shareholders, investors and workforce more and more similarly is a question of developing an internal strategy in complementing the proposed external effect. Dealing with this needs sending clear messages that what can be done practically is already being done, besides, in terms of individual and physical security, and that the suitable steps have been taken in ensuring that the whole company has adopted a preventative stance to the future threats.

The key is enclosing the reasonable concerns of staff as well as other stakeholders from the ill-founded assumptions that terrorism may strike once more an any time. In this respect, alerts are the government and local police businesses with which each organization must be in regular touch.

Nonetheless, if the burden of the responsibility for the unknown is moved from individual staff members to the clear focal point in the company, the labor force particularly can similarly be expected to mainly focus on the more convenient task of ensuring that security is well maintained within the immediate working climate (Liew, 2008). Worries shouldn’t be discharged or dismissed out of hand, but dealt with as many realistic reassurances as a good grasp of the present or current affairs and direct reference to the connections being established with the external organizations will allow for.

However, when the world or even part of it is in conflict, there is normally a temptation to not only think in terms of the worst case situations but to savor the disruption that the grand dramas of the crises afford. For the leadership, this is also a chance of building on the internal commonalities that are formed by an unsafe external environment (Leopold, 2007).

Furthermore, according to Lucy Kellaway, the Financial Times columnist, in her evaluation of the business trends for the year two thousand and three, flexible management trends might soon pave way for a partial return to the version of control and command for the reason that allowing individuals at all levels of a company to take their own decisions hasn’t worked.

An unsafe outside world could effectively emphasize this trend, although the managers may well reflect on the results for the staff confidences. For real, new leadership models have not been more apposite to the challenge of the engagement of staff in contribution to their own and future of business.

Different from the first instincts, indecisive times give specifically the occasion to openly discuss what change can imply in terms of planning for better future, instead of focusing on the present. Conversely, in sectors like banking whereby the euphemistic ‘reformation’ has already had reductions in the staff numbers, we find that those remaining not only need to be at peace with their value to the organization, but should be prepared for the upsurge or growth that may follow when the bad times go.

A coherent internal strategy would give time for the expression of all the apprehensions that are associated with this kind of change and involve a discussion about the way the larger international environment encroaches on these concerns. Also it would rather take place in a head to head context, than through internal e-mail communication whereby reactions are most likely to be muted or channeled through the corridor discussions (Bekaert, 2005).

An open and genuine discussion with or without the external facilitation can however be turned towards the work of bringing the best to bear on everyday operations whereby everybody has a share (Bekaert, 2005). An idyllic situation, probably, but one most likely to give results than a kind of approach based on the ‘pressing on regardless’.

Conclusions and Recommendations

Planning for the indefinite makes good strategic and financial sense, whereby only the commercial indicators are no longer adequate in predicting future market trends. What has now become the major part of the strategy of all companies where the greater market openness, capital flows, and the movements of individuals bring with them the risk and benefits is the ‘Expect the unexpected.

The varying security climates implies that the governments might have to extend their interventions in the financial transactions, management of borders and some other international organizations in forms going beyond what the what the business community is used to. Nevertheless, to some extend, this change has happened already, but the fact is that this intrusiveness is most likely to be here to stay.

Thus, all the more reason then for organizations to be practical in expressing how and when their own requirements and worries fit with the strategies set up by the governments, particularly in areas beyond those conventionally addressed in the corporate strategic thinking. Furthermore, this communication also should b two-way and internal in recognition that the morale of staff is a vital part of the equation. The time is ready, similarly, even for the smallest companies to dedicate strategic time to thinking about what is on the international prospect, before its local significances come home to roost.

Evaluation and Follow-Up

Organizations that do business globally grapple with the political issues that at times even shock the most experienced. A study that was done by PricewaterhouseCoopers together with the Eurasia Group indicated that despite the current efforts, we find that a bigger number of the global organizations assume that they don’t do all they could in managing political risk more effectively. According to the PricewaterhouseCoopers together with the Eurasia Group more effectual management of the political risk might help organizations in protecting their investments and taking advantage of the new opportunities, thus improving the global business performance.

References

Bekaert, G., (2005). The cost of capital in emerging markets, Duke University and Stanford University

Leopold, K., (2007). Political Risk and Foreign Direct Investment, University of Konstanz,

Preston, K., (2006). The Power of Political Knowledge for Strategic Investing, Oxford University Press: New York

Liew, J., (2008). Stock returns, inflation, and the volatility of growth in the money supply, University of Chicago, Chicago