Johnson Graduate School of Management, Cornell University NBA 548. INTERNATIONAL POLITICAL RISK MANAGEMENT

Transcription

1 Johnson Graduate School of Management, Cornell University NBA 548. INTERNATIONAL POLITICAL RISK MANAGEMENT Spring 2007 (January 22 March 7) 1.5 credits MW 2:55-4:10 pm, 134 Sage Hall Instructor: Elena Iankova Office Hours: Wednesday 11:00 am 12:00 pm or by appointment 401A Sage Hall Phone: (607) Course Description. The aim of this course is to introduce students to the political risks involved in international business operations (stemming from various national governmental, national societal, and international sources), and to develop students general understanding of the field of international political risk analysis and management, or managing the overlap between business and government from the business perspective. Through a combination of readings, lectures and discussions, the course further intends to develop practical skills in evaluating and assessing political risk on a global scale. Course Requirements. The final grade will consist of three components: test questions (40%); group project (30%); and class participation (30%). Group project. The project will be an overview of political risks encountered by a particular international firm in a particular country, and an analysis of how to manage these risks. Each report should be up to 10 double-spaced pages. More detailed guidelines will be distributed with the formation of the teams during the second week of classes. The group reports are due on February 25 th by 5 pm. Please send them as an attachment in Word. An in-class presentation of the reports will be conducted on February 26 th and 28 th. In preparing for their country reports, students should consult Alexander Dyck s Country Analysis: A Framework to Identify and Evaluate the National Business Environment Team members are expected to contribute to their country report on an equal basis. If a problem of free riding arises, the free rider will be asked by the instructor to leave the team and prepare a separate project. Test Questions. Two test questions will be sent electronically to the class participants on March 7 th. Students are expected to write a concise essay of up to four pages on one of the two questions. The answer should be sent as an attachment in Word and is due on March 11 th by 5 pm. 1

2 Participation. The grade will be finally based on class attendance and participation in class discussions. Throughout the course, students will be asked to contribute with short presentations (5 to 10 minutes) on the topics discussed in class. Readings. A reading packet is available for purchase. Required: Management. East Syracuse, NY: The PRS Group, Inc., Optional Books: Llewellyn D. Howell, ed., The Handbook of Country and Political Risk Analysis. East Syracuse, NY: The PRS Group, Inc., Jerry Rogers, ed. Global Risk Assessments: Issues, Concepts and Applications. Book 4. Riverside, CA: Global Risk Assessments, Inc., Jerry Rogers, ed. Global Risk Assessments: Issues, Concepts and Applications. Book 5. Riverside, CA: Global Risk Assessments, Inc., Note: The two Howell books are available for direct order from The PRS Group, at tel. (315) /22 (1) What is International Political Risk? Types and Examples F. T. Haner, Radical Global Changes in the 1990s Either Corporate Strategies Change or the Bottom Line Changes. In Jerry Rogers, ed. Global Risk Assessments: Issues, Concepts and Applications. Book 4. Riverside, CA: Global Risk Assessments, Inc., 1997, pp Llewellyn D. Howell, Defining and Operationalizing Political Risk, in Management. East Syracuse, NY: The PRS Group, Inc., 2001, pp Louis T. Wells, God and Fair Competition: Does the Foreign Direct Investor Face Still Other Risks in Emerging Markets? in Theodore H. Moran, ed., Managing International Political Risk. Blackwell Publishers, 1998, pp Note:The State 1/24 (2) Why is Political Risk Analysis Necessary? How to Assess Political Risk? Llewellyn D. Howell, Country and Political Risk Analysis: Applications for Management, in Llewellyn D. Howell, ed. The Handbook of Country and Political Risk Analysis. East Syracuse, NY: The PRS Group, Inc., 2001, pp HBS Note on Political Risk Analysis 2

3 HBS, Doing Business in a Dangerous World. Ian I. Mitroff and Murat C. Alpaslan, Preparing for Evil, Harvard Business Review, April 2003 Llewellyn D. Howell, Defining and Operationalizing Political Risk, in Management. East Syracuse, NY: The PRS Group, Inc., 2001, pp /29 (3) Basic Principles of Political Risk Management William E. Dugan, Planning to Deal with Risk: A Case Study, in Management. East Syracuse, NY: The PRS Group, Inc., 2001, pp Llewellyn D. Howell, Dealing with Political Risk: A Manager s Toolkit, in Management. East Syracuse, NY: The PRS Group, Inc., 2001, pp /31 (4) Political Risks and Investment Decisions Case: White Nights and Polar Lights: Investing in the Russian Oil Industry Case: Intel s Site Selection Decision in Latin America 2/5 (5) Macroeconomic Risks: Government Regulation and Taxation Case: Dell s Dilemma in Brazil: Negotiating at the State Level (reading packet) Elena Iankova and Jan Katz, Strategies for Political Risk Mediation by International Firms in Transition Economies: The Case of Bulgaria, In Journal of World Business, Vol. 38, No. 3, 2003, pp (course web page). Case: Nu Image in Bulgaria (course web page). Joel Kurtzman, Glenn Yago and Triphon Phumiwasana. The Global Costs of Opacity: Measuring Business and Investment Risk Worldwide. The Kurzman Group, 2004 (course web page). World Bank. World Business Environment Survey. Doing Business in 2/7 (6) Managing the Risk of Expropriation Case: Vladimir Investment Dispute in Russia, in GRA 5, pp Case: Financing the Mozal Project (reading packet) 2/12 (7) Nationalistic Populism and Contract Repudiation. Nationalist Resistance to Foreign Takeovers The Economist. Latin America: The Return of Populism. April 12, 2006 (course web page). The Economist. Venezuela s Chavez Squeezes the Oil Firms. November 2005 (course web page). Business Week. Why You Should Worry about Big Oil. May 15, 2006 (course web page). Reuters. Energy Firms Bow to Demands Set by Bolivia. October 30, 3

4 Daniel Drezner. So, You Want to Buy a Strategic American Company. Advice for Foreign CEOs Shopping for Ports, Oil Companies, etc. February C. Gopinath. Dubai Ports World. April CNN. Congress Declares War on Ports Deal. (course web page). The Economist. Cross-Border Mergers in Europe and Nationalist Backlash. September 2005 March Paul Meller. Europe Set to Challenge German Law Guarding VW. The New York Times, October 13, 2004 (course web page). 2/14 (8) Dealing with Corruption Case: The Shakedown, by Phil Bodrock Case: Corruption in International Business (A and B). Robert E. Kennedy, Rafael Di Tella. HBS cases, March and April 2001 U.S. Department of State. Fighting Global Corruption: Business Risk Management (course web page). U.S. Foreign Corrupt Practices Act: Antibribery Provisions (course web page). 2/19 (9) Coping with Intellectual Property Theft Case: GM in China (reading packet) Usha C.V. Haley. Assessing and Controlling Business Risks in China. Journal of International Management, 2003, No. 9, pp Christopher Burgess and Richard Power. Secrets Stolen, Fortunes Lost: How Economic Espionage and Intellectual Property Theft Destroy Businesses and Endanger the Global Economy (course web page). 2/21 (10) Human Rights Issues in Authoritarian Regimes and Activism of International NGOs Note: Democracy Case: The Burma Pipeline 2/25 Group reports are due by 5 pm. Please send them electronically as an attachment 2/26 (11) Presentation of group projects 2/28 (12) Presentation of group projects 3/5 (13) Government Subsidies and Unfair Competition in the Commercial Aircraft Industry Case: Bombardier Versus Embraer: Charges of Unfair Competition (reading packet). Jonathan P. Doh. The Bombardier-Embraer Dispute and its Implications for Western Hemisphere Integration. Policy Papers on the Americas, Vol. XIV, Study 12. December 2003 (course web page). 4

5 Case: Boeing vs. Airbus (course web page). 3/7 (14) Political Risk Insurance Gerald T. West and Keith Martin, The Resurgence of Political Risk Insurance, In Llewellyn D. Howell, ed., Political Risk Assessment: Concept, Method, and Management. East Syracuse, NY: The PRS Group, Inc., 2001, pp Political Risk Investment Insurance: The International Marketplace and MIGA, Gerald T. West, Director, Policy and Environment, Multilateral Investment Guarantee Agency, Washington, D.C. In Jerry Rogers, ed. Global Risk Assessments: Issues, Concepts and Applications. Book 5. Riverside, CA: Global Risk Assessments, Inc.,