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Managing Political and Legal Risks in International Business

Book Title: International Business Strategies: A Comprehensive Guide for Global Leaders

Editors:  Dr. Uzma Tanveer Momin and Dr. Priyanshu Kumar Singh

ISBN: 978-81-991591-5-0

Chapter: 17

DOI: https://doi.org/10.59646/ibs17/441

Authors: Dr. Veena Hada and Dr. Shalini Bahuguna

Abstract

In the complex landscape of international business, political and legal risks significantly influence multinational enterprises’ (MNEs) strategic decisions and operational success. This chapter explores the nature of political and legal risks, including expropriation, regulatory changes, corruption, and geopolitical instability, and their impact on global business ventures. It highlights frameworks and tools for assessing and mitigating these risks, such as country risk analysis, political risk insurance, and compliance programs. Emphasis is placed on the interplay between political environments and legal systems, with practical insights into navigating varying regulatory regimes. The chapter also addresses the role of government relations and corporate social responsibility in managing stakeholder expectations and enhancing legitimacy. Case studies illustrate effective risk management strategies and lessons learned from failures. By integrating political and legal risk management into corporate strategy, firms can safeguard investments, ensure compliance, and sustain competitive advantage in volatile international markets.

References

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