Answer to Question 1
Terrorism is the systematic use (or threat) of violence aimed at attaining a political goal and conveying a political message. International terrorism seeks to do this across national borders. Terrorists direct their strikes at business far more than any other target. Businesses need to be easily accessible and able to conduct transactions with many new persons every day; this introduces a level of vulnerability that is not typically encountered by government offices. Bombings are most common, followed by armed assaults, kidnapping, vandalism, and hijacking. Terrorism nevertheless creates new opportunities for firms in a few industries like construction, security, and information technology. For most companies, however, terrorism also results in reduced revenues or increased costs, and managers must prepare for this. Terrorists intend to affect supply and demand in order to shatter existing economic systems; this brings about both direct and indirect effects. The direct consequences to business are the immediate costs levied on individual firms. While harm is clear to individual firms, from a societal perspective the direct effects tend to be less consequential than the indirect ones. The indirect negative consequences of terrorism begin with macroeconomic phenomena, such as the real or perceived decline in per capita income, purchasing power, and stock market values.A further effect on enterprises may be the failures in power, communication, transport, and other infrastructure due to actual physical damage incurred at the terrorists' hands. Indirectly, this leads to unpredictable shifts and interruption in the supply of inputs, resources, and services. Finally, international terrorism often causes tension between the countries whose citizens or property is involved; the deterioration of transnational relationships can affect foreign buyer and seller attitudes and thus the marketing activities of firms doing business abroad.
Answer to Question 2
A
