Business Risk in an Uncertain Global Economy Essay

Business fortune in an Uncertain Global Economy - Essay ExampleThus, in the coming years, such an milieu would potentially continue to disturb the business enterprise houses across the world. Therefore, so as to remain competitive and carry on their business in such competitive surroundings, companies have to ascertain that they respond spontaneously and are busy enough to adjust to the changing business environment (Economist Intelligent Intelligence Unit Limited, 2009). Consequently, in an aureole where businesses have to encounter continuous change, companies depend on strategic management of their business risk. In this regard, a chip of business firms depend on semipermanent strategies, while on the other hand others believe on short-term policies to deal with the aggressive and demanding business atmosphere (Oliver Wight International, 2008). This paper would focus on the challenges and risks associated in conducting business in an uncertain global economy. The risks c an be of versatile forms and they can be inherent as well as can arise from the different strategies adopted by the business organizations. In addition to comprehending the associated risks and challenges of operating in an runny economic environment, this paper would emphasize on the various techniques used by financial managers to tackle such business risks while trading and investing in nations outside the firms home country. Global Challenges faced in an unstable economic environment As already discussed, business organization can adopt either short term or long term strategies. Both long term and short-term management policies plays a vital design in the efficient business market. However, the business policies that emphasize on escalating the near-term returns are also likely to scupper the enduring financial value of the business by taking up considerable risks and taking in short-range thinking in the business and its numerous operating segments. This is predominantly ac curate for firms functioning in the financial industry. The short-term business outlook of companies makes it critical to encounter and tackle the challenges of operating in unstable global economy and can be highly detrimental for the companies themselves. Several researches have illustrated that a capacious number of chief financial officers would abstain from possible future economic value in nightspot to realize the investor eagerness and expectations for immediate positive returns. In majority of the cases, the systemic risks, wide-ranging impacts and irreversible be of short-term management policies are being rated too low or underestimated (Forum for the Future, 2011). To put it in simpler terms, the tactile gains that can be acquired in the immediate future by the execution of short-term policies by and king-sized make the business firms, principally those functioning in the financial services industry to neglect the long-term intangible gains that could help in the end uring sustainability of the firm. In general, it has been widely stated that a big number of companies have started following a short-term thinking style. However, Brochet et al., (2012) have stated in their editorial named,