Write 1 page essay on the topic Huffman Trucking Company. He choice of the location is important since, a prime location enables the company reap benefits that would have essentially cost the company lots of money to acquire. For example, access to new and efficient technological innovations (Caprio, 2013).Globalization encourages mergers between organizations thus creating bigger companies. This increases the revenue and the value of the organization. The organization gains a larger market share, a decrease in expenses and experiences a decrease in expenses. The prime negative effect of globalization is outsourcing. This is the hiring of new staff from outside the organization to the subsidiary companies set up in different countries. This increases the organization`s expenditure in catering for the increased number of employees.
There are five main factors contributing to exchange rate risks. They include the expectations of the economic growth. An economy responds to a growing population in different ways. If the growth occurs too rapidly, the cost of living will increase due to the unnecessary wages paid. With higher growth comes higher inflation and this increases the exchange rates. On the other hand, deflation, which normally occurs during recession, is a sign of economic stagnation. This lowers the exchange rates. Other factors include, trade balance, central bank actions, employment outlooks and interest rates (Wagner,