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Effective Risk-Management For A Business Term Paper

World-Wide Concepts and Risks Posed by the International Environment World-Wide Concepts deals with a wide variety of products which are profitable but which pose a number of potential legal risks in the form of biotech instruments and drugs. It also has a number of different operations spanning various nations from its manufacturing facilities in China, assembly facilities in Mexico, biotech partners in Israel, and software design partners in Russia and India. All of these countries have very different systems of justice and standards of ethics than the United States in terms of their way of conceptualizing the fair and free way to do business (Meiners, Ringleb, & Edwards 2012, p. 5). For example, India has had a notorious reputation for corruption, which is not atypical of developing world nations which have undergone rapid industrialization. "Socially-acceptable practices" often conceal what would be illegal in other nations and the "inherent opacity of India's business environment, weak implementation of law and its complex and often inadequate regulatory context" means that nations from the United States where regulation and ethical standards are more obviously aligned can make navigating the area a challenge (Owen 2014). This is also true of China and Russia. In China, a combination of underpaid government officials and a rapidly-expanding business culture has resulted in a nation whereby "the prominence of personal relationships over contractual and legal obligations, the scope of discretion and power afforded to government officials, the rapid growth" has made corruption normalized (Hinze 2014).

firms can simply ignore the law when operating abroad. "For instance, some cultures will ignore the use of 'consultation fees,'" i.e. bribes, "that would violate the U.S. Foreign Corrupt Practices Act. This 'tolerance' does not change what is understood as corruption in those nations; it only changes people's willingness to accept various forms of corruption in others and in themselves" (Mallinger, Rossy, & Singel 2008). U.S. firms must still abide by the FCPA regardless of standards abroad. Thus an important part of risk management is the need to be vigilant about different local standards regarding corrupt practices so that World-Wide continues to abide by U.S., not local foreign standards. Not only can becoming being embroiled in a legal or regulatory scandal result in legal costs: it is also bad for business in an era where information can be rapidly disseminated online and ethics is an important part of the image an organization must present to the world. "A commitment to a code of ethics, which takes a firm beyond its legal obligations, is generally not binding on a company" but is still taken seriously by consumers and employees and " violations that are ignored may cause bad press for a company and bad morale for employees" (Meiners, Ringleb, & Edwards 2012, p. 21).
Another risk that every globally-based nation must face is political risk. Russia and Israel are both political hotspots and disruptions of operations…

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