Please describe and evaluate this assignment.
This organization faces a Country/Political risk when changing economic and political conditions can disrupt operations or cause losses. It is of particular concern to businesses operating in developing countries, where it may be harder to predict government regulations and rule-of-law, as well as fiscal stability. In addition, fluctuation in the foreign currency exchange rate can have an impact on the financial performance of businesses due to their need to convert their assets when trading overseas into local currencies.
To mitigate this risk, the organization has implemented several strategies such as hedging against currency volatility through contracts with other parties while also diversifying its investments and production processes across multiple regions so that any one country’s instability does not put too much pressure on overall operations. The organization has been successful in maintaining relationships with policymakers, who can provide insights and guidance about changes within specific markets that are then addressed proactive.
However, despite these measures there have still been instances where unexpected events have caused disruption due both political and economic factors beyond the company’s control – such as natural disasters or period of civil unrest -which have had direct implications on cash flow. This organization appears to have done a good job managing country/political risk, given the frequency with which these issues arise when dealing in international markets.