Terrorism-related risks and their mitigation in international business

Abstract

Terrorism influences political, economic, social, environmental and technological aspects of international business. Many factors can be modified by organizations and this way help them to mitigate and decrease the risks, shocks and influence of terrorism towards their performance and international operations. This thesis focuses on the examination of industries of maritime transport and airlines and additionally on phenomena of expatriation, Foreign Direct Investement and international trade. Finally, sanctions, money laundering and terrorist financing are examined as they integrate to the topic of terrorism and in ways enable or obstruct terrorist events. The purpose of this thesis is to find out what kind of risks terrorism poses towards international business and how can terrorism-related risks be mitigated from the point of view of key international business operations. The sub-questions in this thesis are • How does terrorism manifest itself? • What kind of risks does terrorism create towards international business? • What kind of actions does the phenomenon of terrorism cause international business organizations to take from strategic perspective? The theoretical framework of this thesis is based on literature related to risks of terrorism and their relation to the international business operations of logistics, human resource management and internationalization. This study is conducted by using qualitative research approach. A qualitative content analysis was used as the research method, and the emphasis was on analyzing secondary data including various academic journals and articles. The data analysis was conducted by coding, and classifying key themes and categories from the material related to the topic. The classification system was designed based on the theoretical framework which was applied in this thesis. Based on the analysis and research findings, the key to mitigating the effects of terrorism is to recognize and assess terrorism risks in order to perceive and pursue suitable mitigation strategies. In principle, terrorism has been acknowledged as a growing concern for continuity of international business operations and as a safety hazard regarding logistics, human resource management and internationalization aspirations. However, by recognizing the risks and preparing for attacks in advance by specific mitigation strategies enables the companies to reduce the shocks and impacts of international terrorism. As the phenomenon of terrorism is continuously evolving, international co-operation between private and governmental sectors in addition to mutual anti-terrorism acts are required in order to prevent the operating and future attacks of terrorists