MGT 3375International Business
Country Risk Analysis
Please read the following instruction and complete the first assignment. Your writing shouldfollow the APA formatting style (i.e., title page, inserted citations, citation list, and tables/figuresif applied). The minimum length of each submission is three pages for the main content (doublespaced and 12 ft). Please submit your completed assignment through the “Assignments” tab onCanvas. The deadline is March 3 (11:59 pm).
Before venturing into any country, managers determine the likelihood and nature of country riskand its probable effect on the operations and performance of the firm. Finding out about countryrisks is a task performed in multinational enterprises and other firms with substantialinternational operations. This exercise is designed to help you develop the market research skillsthat you need to understand country risk.
Country risk reflects potentially adverse effects on company operations and performance causedby changes in countries’ political and legal environments. It may appear as harmful governmentintervention in foreign firms’ trade and investment activities. Governments may impose legaland regulatory burdens that increase business costs, delays, or lost opportunities. Governmentsmay restrict access to important markets, impose complex bureaucratic procedures, or limit theamount of profits realizable from foreign operations. Political or legislative actions can harmbusiness interests, even when this is not their intent. Laws may be unexpectedly strict, favor hostcountry interests, or result in unintended consequences. Country risk is especially prevalent inemerging markets and other countries with developing economies.
In this exercise, assume you are an employee with a company that plans to build a factoryabroad. Management is considering each of six countries (India, Venezuela, Poland, Turkey,Namibia, UAE) as locations to build the factory, and you must decide which one is best.Management prefers to establish operations in the country with the lowest risk. Your task is toconduct market research on each country by searching various websites that deal with countryrisk.
Specifically, you need to cover the following aspects in your report:1. Evaluate the level of country risk in each country by examining the following variables:a. Corruptionb. Political rightsMGT 3375International Business
2c. Civil libertiesd. Freedom statuse. Economic freedom2. Obtain scores on the variables from online sources and complete the spreadsheet below.3. Rank the countries from lowest to highest overall risk.4. Interpret the rankings and explain how you evaluate each country.5. Recommend a country to build the factory with solid analyses.
Transparency International (TI) is an independent organization that fights against corruption.TI publishes the annual Corruption Perceptions Index (CPI) (checkhttps://www.transparency.org/en/cpi/2021), which ranks corruption in more than 176 countries.Visit the CPI at TI’s website to obtain the CPI score. In your analysis, you may find other TIresources useful, such as the Global Corruption Barometer, a survey that assesses public attitudesand experience on corruption in dozens of countries. Pay attention to the scale used in the scoresystem.
Freedom House (FH) (www.freedomhouse.org) is a non-governmental organization thatassesses freedom around the world. In numerous countries, FH assesses conditions regarding thelevel of government accountability, the rule of law, and freedoms of expression and belief. At itswebsite, FH annually publishes its Freedom in the world 2020 (checkhttps://freedomhouse.org/explore-the-map?type=fotn&year=2021), an annual comparativeassessment of the state of political rights and civil liberties in over 190 countries. Read thereport and obtain the relevant scores. Pay attention to the scale used in the score system.
The Heritage Foundation (HF) (www.heritage.org) is a think-tank that annually publishes theIndex of Economic Freedom (check https://www.heritage.org/index/heatmap). The indexmeasures levels of economic freedom and government interference in 182 countries. The indexuses criteria such as level of trade barriers, rule of law, ability to enforce contracts, level ofbusiness regulation, and the degree of protection of intellectual property rights.
MGT 3375International Business