Country Risk Management in a Developing Country

Abstract

The recent events in Syria, Iran, Iraq, Tunisia, Egypt, Libya and Pakistan have highlighted the importance of political events to business. Government actions, furthermore, are increasingly pervading all spheres of business activity. Since political events and government actions may affect enterprise performance, there is a need to take them into account in planning and executing strategy. As a response to the increasing impact of political events on business, a new function concerned with the assessment of country risk is gradually emerging in enterprises. Yet, this function is not without its obstacles. This study reports on the obstacles that plague the country risk process in multinational enterprises. In order to achieve this aim, interviews have been conducted with related persons in Jordanian enterprises, who are involved in risk management. It was found that the majority of Jordanian interviewees are unsatisfied with their existing approach for assessing country risk. This research has also offered suggestions for improving practice and offered directions for further research.