International Business: The New Realities, 5th Edition

War, Insurrection, and Violence

War, insurrection, and other forms of violence pose significant problems for business operations. Although such events usually do not affect companies directly, their indirect effects can be disastrous. Violent conflict among drug cartels and security services along the U.S.–Mexico border has led some firms and financiers to withdraw investments from Mexico because of perceived heightened risks and political instability. In India, Tata Motors (www.tatamotors.com) shifted the location of a major new factory due to violent protests by local farmers who feared the loss of their livelihood.28 To minimize losses from violent acts, firms can purchase risk insurance.