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Like any other business, there is always certain risk associated with aviation business, and the risk becomes more accentuated if the aviation business is being planned across the borders. International Aviation business carries a number of usual risks like financial and market risk; currency and liquidity risks; and many other forms of risks. Country-specific risks are one of the pronounced risks associated with International Aviation Business. The country-specific risks find its origin in the fact that doing business within a company’s national borders and across the borders has dramatically different business environment and challenges.
This is the general position though with globalization and integrations of economies like the one being witnessed in the case of European Union, country-specific risks are getting reduced or becoming similar to doing business in one’s own country.
Country-specific risks Once a company expands its operations beyond its own national borders, it gets exposed to a number of country-specific risks, which are directly related to doing business in a particular country.
Three such risks are highly pre-dominant, and they are briefly outlined below: (1) Socio-political risks: No two countries have similar socio-political condition.
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In certain countries, the political situation has a tendency to get de-stabilized often. Social issues also cloud the political establishment’s will to put into place an appropriate policy framework, which may give comfort to foreign companies operating within their territories. This is one of the prime factors to be considered while deciding to do business in a foreign country.
(2) Legal risks: The law enforcement machinery and the legal framework, the judicial system and expeditious settlement of claims through legal process may take time.
The aspect requires careful examination before deciding any overseas business. (3) Terrorist risks: With the spurt in terrorist activities, this has become a real threat and one of the fundamental risks to do business in an unknown country. Unless a careful examination of the situation prevailing in the target country is done, business may suffer if it is subject to terrorist threats and attacks.
Apart from driving away the customers, terrorist risks also have the potential to de-motivate the staff too. Moreover, it is costly both in money terms as well as in terms of human resources. Conclusions Ultimately any business is about management of risks, and the case with the International Aviation Business is not different: it is also about management of risks and if the business is planned to expand across the borders, country-specific risks also require to be addressed suitably.
International Aviation Business. (2020, Jun 02). Retrieved from https://studymoose.com/international-aviation-business-new-essay
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