Political risk in international business primarily involves logistical challenges in transporting goods across borders. True or False?
Understand the Problem
The question asks whether political risk in international business primarily involves logistical challenges in transporting goods across borders. We need to determine the truthfulness of this statement based on the common understanding of political risk.
Answer
False
The statement is false. Political risk in international business relates to potential losses or adverse effects on a company's operations or investments due to political instability or changes in a country's government policies, not just logistical challenges.
Answer for screen readers
The statement is false. Political risk in international business relates to potential losses or adverse effects on a company's operations or investments due to political instability or changes in a country's government policies, not just logistical challenges.
More Information
Political risk includes factors such as changes in government policies, instability, expropriation, and conflicts that can impact international business operations and investments.
Tips
It's important not to confuse logistical challenges, which are a separate aspect of international business, with political risks, which specifically relate to political and governmental factors.
Sources
- Political Risk: Definition, Examples, & How to Manage It - Allianz Trade - allianz-trade.com
- 4.3 Political Risk – Core Principles of International Marketing - opentext.wsu.edu
- Quiz chapter 1 (docx) - CliffsNotes - cliffsnotes.com
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