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Internal analysis of the of Chinese multinationals risk management

Author: ZhangYu From: www.yourpaper.net Posted: 2010-01-10 05:24:51 Read:
Summary The current international financial crisis is far from over, there are various problems of multinational companies in risk management, the need to upgrade the level of risk management in response to the crisis. Firstly, the classification of the risks faced by the Chinese multinationals, then the risk management and internal control logic unified the two closely related areas, and Chinese multinational companies within the risk management issues related discussion from home and abroad discussed. Finally, the paper puts forward some countermeasures and suggestions.
Keywords of Chinese multinationals risk management internal problems

Introduction

For the world as a whole, multinationals are the actors of the international economy and the engine of world economic growth. According to the statistics of the United Nations Centre on Transnational Corporations, multinationals annual gross domestic product accounted for 50% of the GDP of the entire world, they control 40% of world production, international trade 60-70%, 60-70% of the international trade 90% of the foreign direct investment; multinationals is a pillar of the national economy of a country, a country is an important symbol of the comprehensive national strength. The nurturing and development of Chinese multinational corporations are "going out" strategy, an important part of our government, has an extremely important role to promote our country from the economic power to a shift of economic power and to enhance China's comprehensive national strength. According to the statistics of the United Nations Conference on Trade and Development (UNCTAD), in mainland China more than 2000 multinational parent companies and 215,000 overseas branches.
The current international financial crisis, although there is no continued spread of worsening, but also far from over, which led to the dramatic changes of the world economy, multinational corporations operating environment deteriorating. Risk management of the most developed countries, multinational companies have entered the stage of a comprehensive risk management, more than 40% of the Fortune 500 companies in the Fortune implemented a comprehensive risk management, 30% of the implementation of part of the risk management. Chinese multinational development speed is very fast, and compared to the developed-country TNCs, its risk management risk management is still in the planning to the implementation stage to being part of the risk management stage of the transition process. Enterprise Risk Management Survey from the other side, the Chinese enterprises including various types of multinational companies is still in the initial stage of the construction of the risk management: 71% of enterprises are only established risk management processes, but the flow of the lack of mutual The restraint mechanisms; 15.79% of enterprises have established a complete risk management system, but the system is not yet fully operational "; addition, there are 5.26% of the enterprise" does not establish the method and system of risk management, risk prevention depends only on employees sense of responsibility and personal behavior. " The face of the impact of the crisis, 500 of the world class multinational corporations Shangqie powerless; China multinational companies need to reduce the impact of unfavorable factors in the risk management process, to further enhance its risk management capabilities, in response to the crisis.

Chinese multinationals risk analysis

Range and categories of analysis and identification of risk, which is the basic premise of multinational companies implement risk management. My multinational companies engaged in cross-border business activities, facing domestic completely different, more complex, constraints of globalization uncertainty. From different points of view can take risks to multinational companies face in China, according to different criteria, different classification analysis. In this paper, commonly used in the current academic risk classification combined with Miller risk management framework integration classification analysis: risk is divided into controllable risk of multinationals facing multinational companies own almost impossible to control general environmental risks (macro environmental risks); multinationals own can not control but can exert influence to change the risk affect the level of industry environmental risks (in the concept of environmental risk); multinational enterprise variable itself can control risk (micro-environmental risks).
(A) macro-environment risk (general environmental risks)
Macro environmental risk or environmental risk refers to factors that affect various industries transnational business environment, including the First, political risk, meaning the main factors of political instability and political system changes associated factors including political stability, awareness morphology. Second, government policy risk refers to the instability of the government policies that affect the business environment, including unexpected fiscal and monetary reforms, changes in government regulations, and the income of export restrictions. Macroeconomic risks and uncertainties including the level of economic activity, price levels, exchange rates and interest rates fluctuations; social risk refers to the time when people are faced with the beliefs and values ??do not match their own values, may produce social crisis. Social risks may be the predecessor of the political risk, of course, the two risks Group belonging to two different interests of stakeholders - society and government. Fifth, the risk of natural conditions, natural phenomena that affect economic output. Such as geographic location, the impact of multinational international location factors. Sixth cultural risks, scholars He Manqing different cultural background determines the way and preferences, as well as suppliers, competitors, customers and multinational companies, business dealings with multinational competition strategies, tactics and techniques, but also to multinational The company's international economic cooperation in 2009 eight other environmental factors such as the political, legal, economic and other role.
(B) the concept of environmental risk (industry, environmental risks)
The concept of environmental risk, or industry environmental risk refers to factors that affect multinational operations in various industries. Inputs market risk refers to the uncertainty around access to a sufficient quantity and quality of inputs into the production process of the industry, including technology, raw material quality, quantity and price. Product market risks, unforeseen changes on industry output needs. Such a change may be because of changes in consumer tastes change because of the alternatives available, changes in supply complementary products, or the unpredictable changes in demand for imported goods due to the domestic and foreign government policy changes. Competition risk refers to the inability to predict the number and type of products available in the product market, companies may be subject to competitive pressures from the same industry vendors, including competitors' prices, business strategy, market instability, as well as the threat of new domestic and foreign entrants. Technical risk, Miller believes that technological innovation affects a product or production process of the industry, but also posed a threat to this industry, because it may make the industry has established a competitive and collaborative mode confusion. The scholars and Orchestration think technology should also include the risk of leading multinational companies in certain aspects of the industry, a technology, leading to proprietary technology may be exposed to the possibility of theft and illegal possession.
(B) micro-environmental risk (enterprise variable risk)
The micro-environment risks or enterprise variable risk refers to the enterprises themselves can control the factors that affect multinational operations. First, production risk refers to the uncertainty multinational manufacturing operations, including labor uncertainty, and uncertainty as well as production inputs supply uncertainty. Liability risk refers to the risks faced by the multinational companies in the production and sales process responsible for product quality, environmental pollution, personal safety responsibility. Research and development risks, Miller said the uncertainty of the result is the uncertainty of when the time frame for companies to invest in R & D process to complete the project and the project output characteristics of the R & D behavior. Credit risk refers to the the receivables recycling enterprises are facing the problem relates to the recovery of funds. Behavioral risk, refers to the the parochialism behavior of company managers or employees of Miller in the study that the agency relationships within the corporate level risk behavior risks the company. Sixth, the risk of human resources, or labor uncertainty, refers to the changes in the productivity of employees, training of staff effectiveness, employees and trade union issues, such as risk. Seven trading risk, exchange rate risk refers to the impact of specific, identifiable cash flow of foreign currency transactions. The eight investment risk that multinational corporations to invest in a concentrated expression of the host country facing economic conditions, political conditions and government policies continued uncertainty. 9 Financial risk refers to the multinational companies in the financial activities of the financial system due to the role of the internal and external uncertainties, run deviations from the expected target of opportunity or possibility of economic loss.

Third, the of Chinese multinationals risk management internal problems
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