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Political Risk - Venezuela

1.Read this story about Venezuela's nationalization of Cargill and watch this video. Conduct your own research as well. Discuss the following questions:

- Why did Chavez decide to nationalize Cargill? Do you think he was justified?

- If you were the executive of Cargill, what would you do?

http://www.washingtontimes.com/news/2009/may/16/chavez-seizes-cargill-factory/
http://www.youtube.com/watch?v=Z1tHPfraji4

2.Identify three companies that operate internationally and explore the possible sources of political risk for each of those firms, given the countries in which they have a presence. Develop a 5-7 slide presentation outlining the risk and your recommendations to the company executives for how these companies should manage these political risks. ( references needed)

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Why did Chavez decide to nationalize Cargill? Do you think he was justified?

Chavez decided to nationalize Cargill because the company was not obeying the law of the land in Venezuela. In other words, they were not complying to the legal aspects of managing their business abroad. During that time, the country is allowed to take control over with it for 90 days.

Chavez obviously had his reasoning when he was alive, and he had every right to seize that company for not obeying to international law in their country; however, not enough reasons were provided in which to know the full reasons. For example, what laws were broken, and how will it affect the company in the future? The article and the video did not provide that information, so I can only speculate at this point. From looking at it from his perspective, I do believe he was justified in his actions to do as he pleased. After all, he was known to behave as that of a dictator anyways. Lawlessness was his thing, and he felt it was right to seize Cargill for not obeying, so in essence, what he did was right, whether or not the company agreed with his actions or not.

If you were the executive of Cargill, what would you do?

If I were the executive, this is what I would do. First, I would seek to reconcile with Chavez in order to have him let me have full control over my company again. Second, For some reason, if this failed, I would have to ...

Solution Summary

This solution discussed international political risk with various global companies.

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