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Risks Associated with Global Business Operations

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What are the three primary risks inherent in global business operations? How might an organization mitigate them? How should an organization choose the optimal technique for mitigating global risks?

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Solution Summary

In about 300 words, this solution discusses the different forms of risk which are associated with global business operations and how an organization can try to lessen the influence of those risks.

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One of the major risks in global business operations is financial risk due to exchange rate fluctuations. As global business operations involve payments and receipts in multiple currencies, they are exposed to risks due to fluctuations in exchange rate movements. To mitigate such risks, organizations use various hedging mechanisms available in global financial and foreign exchange markets such as derivative like options, forward and future contracts and other tools like interest rate swaps. Organizations can ...

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  • BCom, SGTB Khalsa College, University of Delhi
  • MBA, Rochester Institute of Technology
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