Enterprise Risk Management (ERM) ‘Integrated Framework’ Classification of Political Risks How an MNC’s Valuation is Exposed to Uncertainty (Risk) GW MIBF Lecture FDI Classification of Political Risks GW MIBF Lecture FDI Firm-Specific Risks • Governance risks – Governance risk is the ability to exercise effective control over an MNEs operations within a host country’s legal and political environment – Historically, conflicts of interest between objectives of MNEs and host governments have arisen over such issues as the firm’s impact on economic development, the environment, control over export markets, balance of payments (to name a few) – The best approach to conflict management is to anticipate problems and negotiate understanding ahead of time GW MIBF Lecture FDI Management Strategies for CountrySpecific Risks GW MIBF Lecture FDI Management Strategies for GlobalSpecific Risks GW MIBF Lecture FDI ... Valuation is Exposed to Uncertainty (Risk) GW MIBF Lecture FDI Classification of Political Risks GW MIBF Lecture FDI Firm-Specific Risks • Governance risks – Governance risk is the ability to exercise... to conflict management is to anticipate problems and negotiate understanding ahead of time GW MIBF Lecture FDI Management Strategies for CountrySpecific Risks GW MIBF Lecture FDI Management Strategies... Strategies for CountrySpecific Risks GW MIBF Lecture FDI Management Strategies for GlobalSpecific Risks GW MIBF Lecture FDI