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Ten Categories of Political Risk

Discover ten categories of political risk.

A final categorical list of crisis types comes from the book Political Risk: How Businesses and Organizations Can Anticipate Global Insecurity by Condoleezza Rice and Amy Zegart. This book was specifically written to facilitate learning from political challenges, in both national and international environments. Once again, you will find this list to be quite different from the first three. The perspective is clearly different and the items on the list have undoubtedly been created for leaders with some degree of involvement with and exposure from international relationships and influencers.

1) Geopolitics: Which are cross-border crises such as interstate wars, great power shifts, multilateral economic sanctions and interventions

2) Internal conflict: Defined as domestic crises such as social unrest, ethnic violence, migration, nationalism, separatism, federalism, civil wars, coups, and revolutions

3) Laws, regulations, policies: Which can be thought of as changes in foreign ownership rules, taxation, environmental regulations, national laws

4) Breaches of contract: Where governments renege on contracts, including expropriations and politically motivated credit defaults

5) Corruption: Via mechanisms such as discriminatory taxation, systemic bribery

6) Extraterritorial reach: Which is the cross-territorial legal- or policy-reach of powerful states into the affairs of others in such cases as unilateral sanctions, criminal investigations and prosecutions

7) Natural resource manipulation: Such as politically motivated changes in supply of energy or rare earth minerals.

8) Social activism: Not always a threat, but these polarizing events or opinions become crises when significant social responses are generated in the wake of “viral” events.

9) Terrorism: Which are politically motivated threats or the use of violence against persons or property

10) Cyber threats: Specifically, the theft or destruction of intellectual property, espionage, extortion, massive disruption of companies, industries, governments, or societies.

What did you think about this list? Were there any items that seemed particularly well-suited to your list? If so, add the item or items to the list you have been crafting for yourself. Once again, if you are interested, spend a few minutes thinking through how these new items might impact your different stakeholder groups. Make sure you note all of your thoughts in your workbook or notes.

Now that you have a list of your own, proceed to the next activity to hear a few recommendations for what to do next. Remember that later in this course you will return to your customized list of crisis types. Don’t lose track of where you have documented it.

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High Stakes Leadership: Leading in Times of Crisis

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