What are the most prominent international risks an organization faces when undergoing an international expansion initiative. Include political, economic risks, and limits to expansion.
There are many potential risks and challenges that organizations face when expanding into foreign markets. “Elections and other political events, economic crises, and changing societal attitudes can disrupt the best-laid plans in both emerging and advanced economies” (Heinesz & Zelner, 2010, P. 1). One of the biggest political risks that have been chronicled was the fear that host governments would seize foreign-owned assets. As laws and regulations strengthened throughout history, this was no longer the case. “However, as interest in emerging markets has soared, host countries have learned, according to George Chifor at the University Windsor in Canada, ‘that more value can be extracted from foreign enterprises through the more subtle instruments of regulatory control rather than outright seizures.’ The risk that a government …show more content…
Macau police arrested 17 in people for their alleged involvement with the illegal transactions, but just day’s later money was still moving freely throughout the pawn shops. “Of thirteen shops polled, four would not let people use credit cards to get cash, but eight said customers could withdraw any amount as long as they had the funds in their account, while one said it would allow up t 50,000 Yuan per card” (Master, 2015, P. 11). This event can impact global markets for one main reason; crime. By using this method to bypass currency laws it can attract criminal organizations to migrate to the territory. Macau generates five times the gambling revenue of Las Vegas, which means there are very large sums of currency in play that are able to be manipulated if not regulated (Master,
There are many potential risks and challenges that organizations face when expanding into foreign markets. “Elections and other political events, economic crises, and changing societal attitudes can disrupt the best-laid plans in both emerging and advanced economies” (Heinesz & Zelner, 2010, P. 1). One of the biggest political risks that have been chronicled was the fear that host governments would seize foreign-owned assets. As laws and regulations strengthened throughout history, this was no longer the case. “However, as interest in emerging markets has soared, host countries have learned, according to George Chifor at the University Windsor in Canada, ‘that more value can be extracted from foreign enterprises through the more subtle instruments of regulatory control rather than outright seizures.’ The risk that a government …show more content…
Macau police arrested 17 in people for their alleged involvement with the illegal transactions, but just day’s later money was still moving freely throughout the pawn shops. “Of thirteen shops polled, four would not let people use credit cards to get cash, but eight said customers could withdraw any amount as long as they had the funds in their account, while one said it would allow up t 50,000 Yuan per card” (Master, 2015, P. 11). This event can impact global markets for one main reason; crime. By using this method to bypass currency laws it can attract criminal organizations to migrate to the territory. Macau generates five times the gambling revenue of Las Vegas, which means there are very large sums of currency in play that are able to be manipulated if not regulated (Master,