Question

Flywater Inc. is refusing to expand its global operations into North Marland due to the civil wars that frequently occur in the country. This threat of civil wars in the country is an example of:________.

Answer 1

Answer:

political uncertainty

Explanation:

Political uncertainty refers to a situation when there is no clear acknowledgement on who has the right to govern a certain territory. Civil wars tend to be the main cause of such uncertainty since the current rulers could be overruled by the new ones at any moment.

In terms of business, expanding to a new territory that has political uncertainty usually seen as a risky move. For example, the new government could've just increase the tax rate that couldn't be afforded by the company. Or even worse, just taking the resources by force.