What types of political risk are encountered by fi...

read the case “Doing Business in Coup-prone Fiji”, the closing case in Chapter 6 (pp.271-274) of your textbook and answer the questions below.

Hill, C.W., Cronk, T. and Wickramasekera, R. (2011), Global Business Today: Asia Pacific Perspective, McGraw-Hill

(a) What types of political risk are encountered by firms operating in coup-prone Fiji? (Read Focus on Managerial Implications pp 265 to 268 to assist with this question)

(b) The case study points out that small island economies are often fragile, have a limited range of resources and products, have small domestic markets, and are dependent on exports and open to foreign exchange risks. What steps can small island economies such as Fiji take to hedge against these vulnerabilities?

(c) Does the degree of political risk vary according to the nature of the business? For example, in Fiji, would the level of exposure differ if the business were a bank, a clothing manufacturer, or a tourist resort company? Hypothesise as to what features of a business may raise or lower the level of exposure to political risk.


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