Question

Define political risk. Name two ways that companies can prepare or deal with political risk or volatility in a country. Identify 3 specific ways religion can impact financing operation

Answer 1

Political risk can be defined as a risk in investing and expecting return because of unstable political situation in the country or changes in the political scenario. Organization may experience such situations because these are quite normal issues and may happen when there is a change in power hence the organization need to manage such situations and for that they need to be unbiased in their operations so that political changes should not affect their way or process of doing business. Another way by which organizations can overcome any volatile situation is be possessing adequate back up capital and also a plan that includes probability of such situation because political unrest or change is something that you cannot plan for so it is better to possess this back up capital to compensate for the loss incurred.

Business organizations may experience the effect of religion in their operations and it may happen that religion becomes a major issue which may affect the organization negatively. The ways by which religion can impact financing operation are:

1. If the management consists of individuals from a particular religion, it may happen that a particular religion may keep themselves aloof from doing business with them.

2. An organization should respect the belief of all religion or else it may happen that they might end up hurting the religious sentiment of a particular community.

3. The organization should be free from discriminating employees based on religion because it is a sensitive issue and may kindle communal issues.