A qualitative analysis of the perceptions of the Turkish business world and investors on the development of political risk management strategies for international business activities

Local businesses have started to have increasing management activities abroad and the importance of Foreing Direct Investment (FDI) have risen day by day, by the effect of globalization. There is a range of determinants underlying the desire of businesses for internationalization. In light of the many researches, it can be concluded that political risk has an important role among the determinants of FDI. In addition, high rate of political risks in one region or country can cause both the divestment of available FDI outflow and the renounced FDI plans. By defining and analyzing the political risk factor in FDI, it is essential that political violence events such as terrorism, war, insurrection and coup d'Etat in host countries in which the investors make their investment have an important role in the maintenance of investors' activities. It is also seen that political risk, which results from social unrest, political instability or planned economy policies and breach of contract as well as expropriation and nationalization, has also an essential role in the in the maintenance of investors' business activities. This study aimed to identify the fact of political risk which is a current and an essential matter and the study was conducted to define the effects of political risk and its management for the overseas Turkish investors. This study was also conducted to identify the regions that have political risks and to fulfill a clear need of researches about political risk in Turkish literature review. In light of the data obtained from the specialists in political risk in Turkish business world and from Turkish investors who made investments abroad, content analysis was used with the computer assisted "NVIVO 10.0". Based on this analysis, political risks, economic factors and legal structure are the most prominent determinants for Turkish investors in the decision of FDI. Political risks, on the other hand, have three negative ways of effects: these are impairment of business activities, temporary suspension of business activities and discontinuation of business activities. It has been seen that the perceptions about regions, which have the highest level of political risks, are Middle East and North Africa (MENA) and the regions that have the lowest level of political risks are Europe, North America and Southeastern Asia. Although it is stated that Sub-Saharan Africa region has the highest risk in political risk maps, the Sub-Saharan Africa region, notably, comes to the forefront along with the opportunities. Investors are closely subject to political risk factors which are war, political turmoil, regulatory changes and red tape in the host countries. Investors use the external analysis and the method such as visiting the host countries in political risk analysis. In the political risk management, investors also use strategies in an attempt to develop a close relationship with NGO's and host country's government. In line with the results of viewpoints of Turkish investors and advice of business world, it can be concluded that Turkish investors must use and pay attention to political risk assurance in risk reduction.