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Political RISK ANALYSIS 354http://learn.sun.ac.za/pluginfile.php/763984/mod_resource/content/1/Menu%20summary.m4a
question 1: conceptualization of political risk
c S. 1979. ‘Political Risk: A Review and Reconsideration’, in Journal of International Business Studies , 10
(1), 67-80.
question 2: state to regional political risk analysis
c Bischoff, E & Lambrechts, D. 2010. ‘The Regional Impact of Political Risk: The Conflict in the Niger Delta
and the Political Risk of the Gulf of Guinea’ in Strategic Review for Southern Africa, Vol 1, June 2010,
pp. 58-85.
question 3: micro & macro political risks
c Alon et al. note in their 2006 article Managing Micro Political Risk: A Cross Sector Examination that:
question 4: high political & security risks in Nigeria
c Onapajo, H. and Usman, A.A. 2015. ‘Fuelling the Flames: Boko Haram and Deteriorating Christia-
Muslim Relations in Nigeria’ in Journal of Muslim Minority Affairs. 35:1
c Onapajo, H. and Uzodike, O.U. 2012. ‘Boko Haram terrorism in Nigeria’ in African Security Review. 21:3
question 5: terrorism
c Agbiboa; Shifting the Battleground: The Transformation of Al-Shabab and the Growing Influence of Al-
Qaeda in East Africa and the Horn
c 5 factors to explain terrorism in Kenya: http://time.com/3817586/ian-bremmer-facts-explain-shabab-
terror-attack-kenya/
question 6: political security risk analysis
c Lambrechts, D. and Blomquist, L. 2016. ‘Political–security risk in the oil and gas industry: The impact of
terrorism on risk management and mitigation’ in Journal of Risk Research.
,
,Question 1: conceptualisation of risk
You are required to provide a conceptualisation of political risk.
In your discussion of the concept, you have to address the following:
c Differentiate between:
o political risk and
o political instability/uncertainty.
Big difference – political instability/uncertainty is what causes high political risk
Which one is a property of the environment, while the other is a property of
the business/organisation?
c What is the meaning of micro political risk and why is it important? Provide
examples.
Expand & explain the difference between macro & micro risk:
Macro – risk that affects all industries
Micro PR – how it affects certain industries (examples; oil & gass, in ameanas attack in Algeria, the west cape
mall attack in Nigeria) industry specific risks
c In a changing global environment, how does your conceptualisation of
political risk provide scope to explain new or changing events?
o cobrin article (1979) how they changed
o globalization – BREXIT
o they way we view older political risks: democracy, power, leaders, religious fundamentalism
o unpack how our conception of political risk changed
Theory at the biggining of the term
Conceptualization of political risk – cobrin article (1979)
The key is the last bullet – regarding how political risk changed
(50)
, Q1: political risk
You are required to provide a conceptualisation of political risk.
In your discussion of the concept, you have to address the following:
c Differentiate between:
o political risk and
o political instability/uncertainty.
Big difference – political instability/uncertainty is what causes high political risk
Political Uncertainty and Political Risk
Political Uncertainty = unknown factors that may influence the political, economic and social circumstances
of a particular country or region.
But it does not change the business environment & does not represent risk for international business
Political Risk = the identifiable factors that may influence (preventing) the (political, economic) environment of
a particular country, or a specific sector, industry or firm operating within that country.
Implies analysis, research, calculated opportunities and insights
= Political Risk Analysis
Despite this distinction, the very nature of political risk is disputed.
& the objective of political risk analysis is to assess the level of probability risk will occur
Main difference: political instability/uncertainty is what causes high political risk
uncertainty high political risk
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