International money and finance Essay Example | Topics and Well Written Essays - 1500 words

International money and finance - Essay Example Brewin Dolphin has functions in the UK, Republic of Ireland and Channel Island. For such transnational companies, foreign exchange exposure can be categorised as translational and transactional risks. Transactional risk arises when a firm faces possibility of monetary loss from its business transactions that has been undertaken in foreign currencies. The company is an international investment firm and consequently is involved in deals that require continuous purchase and selling of currencies (Kelley, 2001). On the other hand, translational risk exposure arises when firms invest in foreign assets and record it in firm’s balance sheet. For minimisation of translational exposure, firms should make minimum investment in foreign assets. However, these risks are countered by multinational companies by purchasing different swaps, options, futures and forward contracts (Erb, Harvey and Viskanta, 1996). The company primarily operates in the economic environment of the UK; hence, its functional currency is pound sterling for all kind of financial reporting. However, one positive point in this regard is that the company does not have operation in multiple bases and as a result, the exchange rate exposure for the company is relatively limited. In other words, degree of currency imbalance is less for the firm (Brewin dolphin, 2013). In this regard, management of foreign exchange exposure in the UK depends considerably on restrictions on net open position of working balances of firms. Minimisation of foreign exposure is a national concern and the Bank of England has made it certain for multinational firms that the net amount of foreign currency or currency that a firm transact in should be at least 10 percent higher than the firm’s own capital (Bank of England, 2011). It was determined that the company comply with the foreign exchange policies that have been

Harvard case study Example | Topics and Well Written Essays - 1000 words

Harvard - Case Study Example The Beijing EAP Inc. is a company that provided EAPs to many customers. The nature of its operations required the employees to have strong academic backgrounds that qualified them to operate in this multinational service company. Being the largest market holder in the Mainland China, the Company had a huge customer base that categorized it as a big corporation. Amongst some customers of BEC were IBM, Siemens, Samsung, Lenovo, Guadong Mobile, and the China Development Bank. Consequently, the Company had many projects that prompted the management to subdivide the projects to different segment managers2. In this case, for instance, Mr. Yang represents a training department manager having a communicational breakdown with Ms. Song, a project manager, based on the confusion of the roles each one was to perform. In some cases, the tension escalated to a point where the employees did not know who to approach concerning the progress of projects. Both being project managers at the BEC, the two senior employees had no idea of the organizational structure. Both the employees had no clear identity of the functions that were under their jurisdiction3. This problem faces many large corporations, therefore making it difficult to execute their project as required. However, it is important to outline the authorities, responsibilities, and restrictions of the project managers. This goes a long way in ensuring that similar communicational breakdowns are avoided in the future for corporations. The major challenge that the BEC had was the lack of communication. When Mr. Yang and Ms. Song got onto the project, they assumed to understand their duties. In difficult situations, each failed to consult the other to comprehend the magnitude of the problem. As a result, the two employees endured poor working relationships. Existence of hierarchy in the management of projects was another problem that