Business Environment and Communication, Part 3
Question 1: Discuss some of the problems associated with repatriation.
Answer 1: When expatriates return to their home country, they go through a process called repatriation. Problems can occur during repatriation. The most significant problem is reverse culture shock. Employees suffering from reverse culture shock have difficulty reentering their home culture and business organization. Surprisingly, most companies do not put much effort toward stopping or minimizing these problems. Surveys have shown that only 31 percent of businesses have repatriation programs. Failure to minimize repatriation problems can have long-term implications for a company. Few candidates will want to take international assignments after seeing what has happened to their colleagues. In turn, many employees will see international work as a negative career move, and it will be much harder to find quality candidates willing to take the job.
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Question 2: Describe the steps of a typical international risk management system.
Answer 2: Every successful multinational corporation understands that there are risks involved with international business, and that they must take steps to manage those risks. This is done by implementing a risk management system. A typical risk management system consists of five basic steps. First, an organization identifies its risks. Second, it defines its risk attitude. An organization’s attitude can be risk averse (conservative), risk neutral, or risk taking. In the third step, the company classifies and analyzes its risks. Fourth, it implements risk control mechanisms. Fifth, the organization continues to monitor its risk and update its management system if needed.
Question 3: Describe the different ways an organization may identify risk.
Answer 3: Organizations can choose from many different risk identification processes. One common process covers commercial, country, and financial risks. Commercial risks are the risks of a buyer or supplier failing to uphold their end of a commercial contract. Country risks deal with the risk of wars, political unrest, or economic upheavals in another market. Financial risks include the risk of fluctuations in the value of a currency that is used in transactions. Risks may also exist at the strategic or operational level. The strategic level refers to corporate decisions and strategic objectives, while the operational level refers to production and logistics. A risk identification process could also observe internal risks (such as operational or legal risks), and external risks (such as political or legislative risks).
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