Spain Oil Company
What could Spanish oil company do to avoid the risks?
Please read and review the materials on the case of Repsol and Argentina’s expropriate of Spain’s share of the oil company. Using the 3 strategies for managing political risk, what could the Spanish company done to avoid the risk.
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Please discuss the issues that resulted in the expropriation and what they could have done differently.
Requirements:
1. in text citations-works cited.
2. 3 paragraphs, each
Answer preview
Risk management in a business is essential to save a company from huge losses. In foreign investments, the ability to manage political risk is vital since risks such as conflicts and violence or terrorism may lead to huge loses to a business. In the case of Repsol and Argentina’s expropriation of Spanish shares of the oil company, the Spanish company suffered ten billion dollars and only got five billion dollars after two years during the European crisis in 2012. The Spanish company could have used strategies such as adaptation, political influence and also try to gather information for it to understand any legislative change that may influence its operations and through this, it could be safe from the $10 billion loss (Rucinski, Gonzale, and Gray, 2014). Risk management ought to be a priority in all business strategies since risk leads to loss of huge losses and leads to termination of substantial capital investments.
Risk management strategies that the Spanish oil company could have used
The Spanish oil company could have utilized the…
(750 words)