ABSTRACT
This chapter introduces some of the main political risks that international firms have faced, and suggests how the global political landscape of business is evolving. It explains political risk as generally experienced and understood by international managers. The chapter outlines the key trends and conditions that have formed the 'background noise' in terms of risk in the global environment, and their general effect on businesses exposed to them. It examines how tensions between countries can arise and their implications for international business operations. The chapter describes friction and tension between competing socio-political visions and interests at the domestic national level, and how this has translated into challenges for foreign businesses operating in areas where such tensions give rise to intense political rivalries and direct confrontation. Terrorism is the targeted use of force to cause maximum psychological impact on the enemy, and to inspire and mobilise political support through dramatic acts of rebellion.
