Summary of Political Risk

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Rating

10

Qualities

  • Analytical
  • Applicable
  • Concrete Examples

Recommendation

How can businesses of all types examine and manage political risk? Condoleezza Rice and Amy Zegart’s book, which grew out of the MBA course they teach at Stanford University, tackles these critical questions. The authors’ well-structured analysis connects the dots between today’s fast-moving global political risks and what businesses need to know about them. They guide readers through plausible risk scenarios and provide a valuable, highly practical framework for protecting against, preparing for, and recovering from risk events that all companies can employ.

About the Authors

Condoleezza Rice served as the 66th US Secretary of State and is a political science professor at Stanford University. Amy Zegart is a senior fellow at the Hoover Institution and the Freeman Spogli Institute for International Studies at Stanford.

 

Summary

SeaWorld’s Blackfish scandal illustrates the dangers of contemporary political risks.

The 2013 initial public offering of SeaWorld Entertainment’s theme park was a great success. A year and a half later, however, stock prices were down by 60% and the CEO resigned. The culprit: a new kind of political risk, unique to the 21st century.

The 2013 documentary film Blackfish, which detailed the harm inflicted on the park’s orca whales, and their trainers, caught the eye of celebrities, who, thanks to Twitter, helped the movie and its message go viral. Public outcry grew, animal rights organizations jumped to action, and regulators and lawmakers began investigating. The domino effect that the film triggered became known as “‘the Blackfish effect.”

Political risks stem from five main sources. 

Though organizations can damage themselves by not appropriately addressing internal behavior or culture, risks frequently come from external factors, including geopolitics, social or ethnic unrest, policy and regulations changes, ...


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