How to Manage Political Risk in a Post-Pandemic World

Subject: Management
Pages: 2
Words: 573
Reading time:
3 min
Study level: College

Summary of the Article

The article provides five possible areas to assess the political risk that companies may have in the post-pandemic world. To begin with, Cline et al. (2020) claim the political risks that a company faces to be the first area to assess the threats of the post-pandemic world. Then, the impact of those political risks on a company and defining people responsible for the political risk management are two other areas. Finally, deciding what tools a company has to manage political risks and whether political risk management is central to the operation of the business are the remaining areas discussed by Cline et al. (2020). Therefore, by providing mentioned means to assess the political risks, scholars encourage organizations to pay more deliberate attention to the political issues in the post-pandemic world.

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Transnational Management Issues

The article is connected with various transnational management issues, including country-level and geopolitical ones. For instance, Cline et al. (2020) claim that “some 68% and 62% of executives, respectively, say country-level and geopolitical risk are having a very high or high impact on their company” (p. 2). In other words, such geopolitical issues that might lead to challenges in transnational corporations are the role of the USA in the international arena, stability of the EU, and Sino-US relationships (Cline et al., 2020). This means that the transformation of relations between some states and the changed role of cooperative political groups impact international businesses. For example, worsening relations between China and the United States of America may harm the companies located in both states because of a possible increase in prices, unforeseen legislation, and even sanctions.

Considerations in COVID-19 and Post Pandemic Environment

The article also adds knowledge to the theme of the impact of COVID-19 and the post-pandemic world on businesses, making it essential to learn and apply political risk management. According to Cline et al. (2020), “the three that stand out the most in this regard are supply chains, R&D and intellectual property, and human resources” (p. 3). Moreover, scholars argue that the COVID-19 pandemic and governments’ reactions to it highly impact businesses in all of the mentioned spheres (Cline et al., 2020). Therefore, the article argues that companies are already facing challenges over the intellectual property issue of invented vaccines. Moreover, the article encourages companies’ management boards and executives to foresee possible political risks through data collection, such as warning indicators and insights from external sources.

Personal Reaction to the Article

From my perspective, the article states its core argument in a very direct and precise way, which can be considered a strong advantage. Moreover, from the very beginning, scholars have defined five areas to assess political risks and manage them, which helps to trace the idea very clearly throughout the paper (Cline et al., 2020). Regarding the content of this academic work, all the possible risks with the emphasis on transnational companies and the post-pandemic environment were discussed. The article not only provided careful consideration of the political threats but also suggested businesses’ executives some efficient ways to manage them.

As it was said in the paper, only half of the executives are confident about their ability to effectively manage political risks (Cline et al., 2020). To be honest, I highly assess this article and find a wide variety of data-driven arguments that might be used in future academic works because it tries to encourage executives to use tools for political risk management.

Reference

Cline, M., Shames, J., & McCaffrey, C. R. (2020). How to manage political risk in a post pandemic world. Ernst & Young Global Limited.