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International Business Risks

In: Business and Management

Submitted By irala75
Words 711
Pages 3
International Business Risks
Tatiana Irala
MGM336-1301A-05
Instructor: Anna Goodloe

Even though there are many opportunities available when conducting business internationally, the amount of risks that arise can also be limitless. However, this should not be discouraging when the managers that work abroad are well-trained and informed about the host country’s political, cultural, environmental, and economic risks and differences. These different environmental factors are constantly changing, often drastically; making it challenging to manage. For instance, the political environment in another country may be quite unstable due to a recent election. Furthermore, violence and revolutions complicate when traveling through the host country. Another risk that presents itself is in the form of culture shock. Even if the managers are familiar with the host country’s cultural differences, cultures also evolve throughout time. Environmentally, managers must respond to the future forecasts to determine the probable impact, and to ensure the survival and growth of the organization as it interacts with its dynamic environment (Phatak, Bhagat, and Kashlak, 2009).
The host country in question here is Brazil with its booming economy and market for growth. Although, Brazil is known for its many negative connotations regarding bribery, corruption, and organized crime; the conditions in the labor market however remain favorable. Unemployment is at the lowest it has been in years and the middle class continues to grow. With the growing middle class comes demand for consumer goods, specifically in the fashion and retail departments. Inflation has remained under control with the adoption of an inflation targeting system in 1999 (Overseas Business Risk – Brail, 2012). The exchange rate continues to be an issue though with the Brazilian Real up to US$1:R$2.02. Regarding the crime...

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