Operational Risk Rating
My classes include a statement of the contexnt in which the subject matter will be studied. This context is usually shown by the following diagram.
The central part of this diagram is adapted from Porter, Michel E. Competitive Advantage: Creating and Sustaining Superior Performance. The Free Press, 1985.
The nature of the socio-political-economic forces driver can be described as country risk or, in the terms of The Economist, operational risk.
When considering whether or not to do business on a global scale one needs to take into consideration the risk associated with the socio-political-economic environment. While I expect students to give consideration to this matter in all my courses, it becomes particularly important to do so in the Capstone class.
Information abounds regarding risk of this nature (sometimes also called country risk). A good place to start to investigate this is The Economist. For example, I was prompted to make this post by the article, Operational risk ratings: Asian fusion, in the April 28th, 2008 issue.
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