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Article

Organisational support for the functioning of enterprises in the context of geopolitical turbulence

Valentyna Cherviakova Tetiana Cherviakova
Abstract

The aggravation of political confrontation and economic competition between the world’s leading powers has led to the destruction of established international relations, armed conflicts, the introduction of sanctions, financial instability, and restrictions on trade and cooperation in the technological sphere, which significantly increases the complexity of conducting both local and international business. Since geopolitical risk is a relatively new and serious challenge for companies, there is a problem of investigating its theoretical aspects and developing organisational and methodological approaches to managing it at the level of business entities. This paper was devoted to the investigation of the essence of geopolitical risk, approaches to its classification, assessment, and accounting in the financial and economic activities of enterprises. The authors’ definition of geopolitical risk is formulated and its classification by forms of manifestation is proposed. A critical review of methodological approaches to quantitative and qualitative analysis of geopolitical risks was carried out. Analysis of the relationship between the levels of the geopolitical risk index and some macroeconomic indicators of Ukraine showed that the variation in the levels of gross external debt depends on the geopolitical risk index of Ukraine by 88%, the consumer price index – by 86%, direct investment from Ukraine – by 84%, direct investment in Ukraine – by 76%, the gross domestic product of Ukraine – by 90%, the official exchange rate of the UAH against the USD – by 98%. The obtained dependencies allow predicting the behaviour of economic entities depending on the dynamics of the level of geopolitical risk and developing appropriate response scenarios. Based on the recommendations of risk management experts on ensuring the functioning of enterprises in the context of geopolitical turbulence, a list of measures is proposed that companies should take to anticipate and properly consider changes in the geopolitical situation and effectively counteract the associated risks

Keywords

geopolitical risk; uncertainty; multipolarity; correlation; risk management; diversification

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Received 13.08.2024, Revised 05.11.2024, Accepted 17.12.2024

Retrieved from Vol. 11, No. 2, 2024

Suggested citation

Cherviakova, V., & Cherviakova, T. (2024). Organisational support for the functioning of enterprises in the context of geopolitical turbulence. Economics, Entrepreneurship, Management, 11(2), 19-33. https://doi.org/10.56318/eem2024.02.019

https://doi.org/10.56318/eem2024.02.019

Pages 19-33

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