We hope that once we engage in international business activities that it will be smooth sailing. The reality is that won't be the case. We could face varied trade restrictions that could have an impact on the way we do business (e.g. how much we can sell, where do we produce). We also encounter changes in the political systems, which have several implications for international business. The potential gains by engaging in IB are large, but so are the risks.
Hill (2014) points out that "the attractiveness of a country as a market and/or investment site depends on balancing the likely long-run benefits of doing business in that country against the likely costs and risks" (p.85)
Discussion assignment:
Supranational organizations such as the World Bank (www.worldbank.org) and the World Trade Organization (www.wto.org) oversee much of the legal framework within which the world trading system operates. Political frameworks for industries or country groupings are influenced by organizations such as the Organization of Petroleum Exporting Countries (www.opec.org) and the Organisation for Economic Co-operation and Development (www.oecd.org). Using globalEDGETM resources and the online portals cited here, address the following questions:
- What is the goal of each organization, and how does it go about achieving its goal?
- By viewing the news and press releases at each Web site, summarize the latest initiatives of each organization.
- For your assigned country (table below) discuss what's the political risk for that country; and what initiatives, sanctions, or working programs do these organizations have in place in that country or that benefit that country.
support your perspective with strong theoretical arguments.
Country choosen: Italy