Nowadays, businesses operate in an uncertain environment and the managers can never know what will happen in the future (Arnold, 2005). Meanwhile, the economic crisis has turned that world upside down; it is a change for ever. The global economy was changed during the past two decades; because of globalization, the firms are not only trade or invest in the company’s domicile, but also trade or invest in other countries. Then management will face a lot of business risk in global economy. There are many different way to define risk; simply, risks are opportunities to be seized. Risk management identifies risks with new opportunities to increase the probability of positive outcomes and maximize returns. The aim of this essay is identify the global challenges and risks and analyze the techniques available to financial managers to deal with risk when trading or investing in countries outside of the company’s domicile. In the structure, firstly evaluate the current global economic situation and what is the challenge in this global economic situation. Secondly, identify the risks do companies face operation in uncertain global economy. Finally, it will consider and analyze the techniques available to financial managers to deal with risk when trading or investing in countries outside of the company’s domicile. Outline of this essay,
It is no doubt that today it is a globalization, however, due to the global economic crisis in 2008, the global economy is uncertainly and unstable. According to Arnold (2005) businesses operate in an uncertain environment and the managers can never know what will happen in the future. The global economy is divided into several situations.The one is low-income countries which CNI per capita of less than $936 and these countries have such serous social, political problems and economic that they represent limited opportunities for operations and investment. The next one is lower-middle-income countries which with a CNI per capita between...
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