Global Risks faced by a Multinational Company

[Name of the InstitutionTable of Contents

Introduction1

Global Risks1

Three clusters of Global risks2

Multinational's Role3

General Electric Company3

Challenges faced by General Electric3

SWOT Analysis6

Strengths7

Weaknesses7

Opportunities8

Threats8

Recommendations9

Conclusion9

References10

Global Challenges faced by a Multinational Company

Introduction

When a company spread itself outside the national boundaries, it is considered as a multinational. At the present time, the world is facing great global challenges. This is the reason because of which the whole sphere is suffering. Multinational companies are not exempted from these challenges. Thus, they are at the requirement to completely and properly scan their environment so as to deal with the risks facing their business. A report published indicated that at present times, the number of risks has got increased today despite the fact that the condition from which the world is suffering today is already worst. The threats of disastrous impacts are observed by almost every business in the world. (Van der Elst & Davis, 2011).

Global Risks

Global risks are the external environmental forces with which an organization has to compete when it moves outside the country. According to Global risk forum report 2011, the two global risks that were faced by the whole world include economic disparity and global governance. These two risks are interconnected with the rest of conditions and thus are considered the major cause of evolution of other global risks. They serve as constrain, in order to deal with other specific, global risk. The point brings to light the fact that before the solution or dealing with any other environmental risk, companies have to effectively deal with them. Despite of the fact that world has become a global village, but the reality cannot be neglected that it has shrunk the world.

Three clusters of Global risks

Apart from the above two mentioned risks, the three clusters of risks were introduced in the 2011 analysis.

These include:

Macroeconomic Imbalances: This cluster includes a number of risks including, currency economic instability, fiscal crises and asset price collapse. The high levels of debt in advanced economies, increasing wealth are some of the major reasons for these risks. Saving, and trade imbalances are increasing, and long term pressures on the fiscal positions are bringing the organizations into severe stress. A coordinated global action could serve as a treatment to the challenges, but it is very challenging to bring a number of nations on a single track.

Illegal Economy Connections: Systematized crime, corruption, illegal trades are some of the risks covered under this cluster. These risks are highly costly for the legitimate activities as well as they are the reason of the weakening of number of states.

Water and Food energy Issues: As the population of the world is increasing so are the needs. Demand for the basic necessities such as water, food and energy keeps on increasing each year, but the productivity and availability is not up to the requirement. In such a situation, the political and social instability are obvious, resulting in environmental damages.

The recommendation to deal with the above three clusters highlight the point ...