By removing plagiarism, DEFINE $[$using definition from Deresky $(2021)]$ and DESCRIBE the global risks that surround the global political, economic, sociocultural, legal, and technological environments? List $3$ risks for each of the $5$ environments. In your discussion, provide EXAMPLES attached to the chosen risks.$-$Proactive, globally oriented firms maintain an up$-$to$-$date profile of the political and economic environment of the countries in which they maintain operations $($or have plans for future investment$).$ Surveys of top executives around the world show that sustainability$$economic$,$ political, social, and environmental$$has become a significant worldwide issue. Executives who recognize that fact are leading their companies to develop new policies and to invest in sustainability projects with the purpose of benefiting the environment as well as profitability$\mathrm{.}97$ The opening profile provides a recent example of how political developments can create considerable uncertainty and therefore affect strategic decisions of local firms and multinational corporations. Among the strategic and operational risks global companies report, the top four were government regulation, country financial risks, currency risk, and political and social disturbances; these were followed by a poor legal system; problems with suppliers, customers, or partners; terrorist attacks; and theft of intellectual property$\mathrm{.}98$

From a separate survey by the Aon Risk Solutions Company, we can see the top ten risks as reported by $2,600$ risk managers from $60$ countries, giving us an overview of how concerns can change over time. The risks of economic slowdown, damage to reputation$/$brand$,$ and acceleration of changes in market drivers were the top three risks facing organizations according to the $2019$ Aon survey.

The Aon report noted that $$investors seem to have had the wind knocked out of them by a series of incidents, each impacting the world economy$$s ability to manage volatility.$$ Some of these incidents include the uncertainty surrounding Brexit, U$.$S$.$ interest rates, and slowing economic growth in Europe, China, Japan, as well as many emerging markets. The report also identified geopolitical tensions$$especially between the United States and China$$as a driver of increased risk$\mathrm{.}99$ That led the researchers to conclude that formal risk management using business analytical tools would be more useful than experience in identifying new risks. According to the $2019$ Aon report, the top ten risks overall were:

Economic slowdown

Regulatory$/$legislative changes

Increasing competition

Damage to reputation$/$brand

Business interruption

Acceleration of changes in market factors

Cyber security

Commodity price risk

Cash flow$/$liquidity risk Inability to innovate$/$satisfy customer needs$\mathrm{.}100$

Regions view these risks differently. For example, cyber security is the top risk in North America; however, economic slowdown is the top risk in both Latin America and the Middle East. In Europe, acceleration of changes in market factors is most important, while in the Asia$-$Pacific region, damage to reputation$/$brand is considered the most important risk.

An additional important aspect of the political environment is the phenomenon of ethnicity$$ a driving force behind political instability around the world. In fact, many uprisings and conflicts that are thought to be political in nature are actually expressions of differences among ethnic groupings. Often, religious disputes lie at the heart of those differences. Managers must understand the ethnic and religious composition of the host country to anticipate problems of general instability as well as those of an operational nature, such as effects on the workforce, on production and access to raw materials, and on the market.

Political Risk

Clearly, as evidenced by the $2011$ Arab Spring uprisings, the $2014$ annexation of the Crimean Peninsula by the Russian Federation, and the $2019$ political unrest in Venezuela, major political changes can affect the business environment and risk level almost overnight. As far as political risk is concerned, a survey$$based on $211$ countries and territories$$by Aon Risk Solutions $($the firm discussed earlier$)$ found that the political risk level is rising in more countries than it is declining. That conclusion was based on the level of exposure to factors such as currency inconvertibility and transfer; strikes, riots, and civil commotion; war; sovereign nonpayment; political interference; supply chain interruption; and legal and regulatory risk$\mathrm{.}101$ It is clear from the past that firms operating in some countries are exposed to political risks that can drastically affect them with little warning, as illustrated by the opening profile.

Political risks are any governmental action or politically motivated event that could adversely affect the long$-$run profitability or value of a firm. Like many countries in the world, certain countries in the Middle East have faced periods of instability in recent decades. As such, political