Risk Management Issues in the UK - Term Paper Example

It is expected that major retailers will also experience a decrease in the market value of stocks.In order to strengthen its position in the market, British Airways launches its new airline subsidiary which would fly between the United States and Europe naming it Open Skies. Together with this development is the implementation of more flexible employment conditions relative to the current system. This includes the recruitment of new cabin crews for the airline in the United States. BA also adds that "there would be no link between the new airline and the seniority list for the existing BA mainline pilots.

" This decision brews protest from the Balpa which is the company's powerful union of pilots.This article highlights the operational risk which is currently faced by BA. The airline is currently facing the threat of incurring losses because of its internal problems with the staff. If the company pushes through its new system of recruitment, there is a huge possibility that Balpa will protest thus, hurting and even paralyzing the operation of the airline.Today, Financial Times reports another bad news for the UK retailing sec.

bad news for the UK retailing sector: "Sterling dropped to a record low against the euro and its weakest level in six months against the dollar on Wednesday" (Garnham 2008). This depreciation of the sterling is another blow for UK retailers who convert their sales from sterling to euro. Another sad news is that because of the economic climate, it is expected that sterling will slide further in the coming months. This article both shows and discusses the effects of exchange rate risk. Because the foreign exchange rate in the market is subject to market conditions, the economic condition, as well as other factors, can largely contribute to the appreciation and depreciation of currencies which directly impacts the operations of the business organization.

In the news, it is noted that the depreciation of sterling adversely affects Marks and Spencer which reveals a 2.2% decline in like for like sales during the last quarter.