Political Risks in Business

Inditex group, which owns such brands as ZARA, Bershka and other internationall known fashion brands, has chosen to set up a production factory in the capital city of Kenya- Nairobi. Inditex group has already factories in other African countries- Tunisia, Morocco and Algeria. They have chosen Kenya because it is the regional hub for trade and finance, but company has to face Kenya’s political domestic challenges as well.
Firstly is the definition of the political risk „The likelihood that a business’s foreign investment will be constrained by a host government’s policy”. They can be related to internal conflicts, threats to stability from outside world, degree of the control of the economic system, effectiveness of public administration, corruption, labor relations and social peace.…