What is legal risk in international business?
Answers
Answered by
0
There are several definitions for legal risk. Some definitions focus on the risk of loss arising from non-compliance with the law, while others focus on the environmental uncertainty created by the governments that pass those laws. Regardless, legal risk is an “all-pervasive threat.”4 In the international business setting, legal risk may arise from non-compliance with local banking laws, which are often diverse and complex when considering products or services made available in many countries. There is also the possibility of litigation resulting from any failure to properly transfer funds in an international business transaction.
The Age of Social Media
The power of social media amplifies risk because a seemingly minor incident can rapidly become a reputational nightmare. In the words of a chief risk officer for a large Australian insurance and financial services firm, quoted in an article on Forbes.com: “There’s been a recognition that with the increasing influence of social media and social media sites, as well as activist sites, issues can escalate very quickly. This can threaten your reputation more significantly than in the past. As a result there’s more sensitivity to reputation risk in the context of those types of social developments and technology developments over the last five years.”5 The tendency for social media to worsen reputational risks can be exacerbated by the interactions between different countries’ cultures that occur in any international business transaction.
Benefits of a Positive Corporate Reputation
Some companies do an inadequate job of managing reputational risk and tend to focus their resources on repairing their reputations from harm caused by past events.6 The benefits of having an excellent legal and reputational risk management process in place come with time. Rarely are there instant positive results – but the benefits can be significant in the long-term. Companies with positive reputations foster greater customer loyalty, are perceived as providing more value (and, therefore, can usually charge a premium) and attract better employees.
I hope help u
The Age of Social Media
The power of social media amplifies risk because a seemingly minor incident can rapidly become a reputational nightmare. In the words of a chief risk officer for a large Australian insurance and financial services firm, quoted in an article on Forbes.com: “There’s been a recognition that with the increasing influence of social media and social media sites, as well as activist sites, issues can escalate very quickly. This can threaten your reputation more significantly than in the past. As a result there’s more sensitivity to reputation risk in the context of those types of social developments and technology developments over the last five years.”5 The tendency for social media to worsen reputational risks can be exacerbated by the interactions between different countries’ cultures that occur in any international business transaction.
Benefits of a Positive Corporate Reputation
Some companies do an inadequate job of managing reputational risk and tend to focus their resources on repairing their reputations from harm caused by past events.6 The benefits of having an excellent legal and reputational risk management process in place come with time. Rarely are there instant positive results – but the benefits can be significant in the long-term. Companies with positive reputations foster greater customer loyalty, are perceived as providing more value (and, therefore, can usually charge a premium) and attract better employees.
I hope help u
Similar questions