International Financial Management Assignment Example | Topics and Well Written Essays - 500 words

International Financial Management - Assignment Example Hedging is one feature of the forward market. MNC’s. Hedging the amount that they are supposed to receive or pay in foreign currency will make the spot rate unimportant for them till their future payment. There is very little difference between the forward and future market. But the differences are very important. Unlike the forward market, which is characterized by personalized contracts with no initial payment necessary, future market have standardized contracts with at least marginal payment paid initially. This implies that the amount that is being transacted can be of any value. Future contracts specify the volume of a particular currency to be used for transaction at the specified date. Secondly, for forward contracts there is no organized exchange present in the future contracts as the contracting parties directly do the transactions. Thirdly, the contract size depends on the contracting parties in case of the forward contracts. But, for the future contracts, contract s ize is standardized. Fourthly, future contracts are government- regulated and bears low risk while forward contracts are unregulated and are high-risk bearing as there are chances of default. (Madura 2009, pp. 108-110)   Speculators purchase currency futures to capitalize their expectation about the ups and downs associated with respect to currency movement. Suppose a speculator expects appreciation of a particular currency in the future. They can then buy future contracts and hence lock the price of that currency for a specific settlement date. On this date they can buy their currency at a rate specified in the futures contract and sell it at the spot rate, which is less than the rate specified in the futures contract. If  the spot rate has appreciated, then they extract profit. Different expectations of the speculators guide their decisions to sell and purchase future contracts. Corporations use currency futures to hedge and thus reduce their

Cross-cultural business issues Coursework Example | Topics and Well Written Essays - 750 words

Cross-cultural business issues - Coursework Example Most of them concentrate more on basic commodities, and luxuries such as extra hard engines may have a poor market penetration. The national language is Chinese, and very few people understand English. This makes communication between the marketers and the Chinese nationals difficult. Translations from English to Chinese may lose some of the intended meaning and impact (Emery and Tian, 2010). Chinese people have a slow decision making and response tradition. They have to scrutinize every detail before making their judgment. The marketers take long before getting the response, which slows down the marketing process. Gender differences are experienced in china. Men are regarded as social figures of authority, influence, and respect. Male marketers are therefore more effective than female counterparts. Social relationships (Guanxi) are family ties, relationships with strangers, and relationships with familiar people. Marketers will be regarded as strangers at first. The Chinese people h ave little ties with strangers, and may fail to communicate with them. This will hamper effective marketing for the engines. However, these ties may improve with time when the two parties become more familiar with each other. Cross-cultural communication refers to the use of language during marketing. In china, the Chinese language is dominant, and a larger percentage of the population does not understand English. The marketing staff has to engage the Chinese in word of mouth. This occurs during discussions for customer expectations, satisfaction, and product quality. English marketers may fail to explain all engine qualities or collect all expectations from the customers. Translators are required, which increases the marketing cost and the process may take longer. Marketing also requires advertisements through billboards, television, radio, internet, and newspapers. The advertisements are in Chinese language or a combination of both. Translations from English to Chinese lose some o f the intended meaning affecting the impact of the products on the consumers. The locals have to develop friendship with foreigners before they interact with them according to guanxi. Cultivating these relationships may involve dining with them or attending their social gatherings. This prolongs the marketing period (Emery and Tian, 2010). Ethnocentrism refers to reluctance to accept foreign goods. The Chinese people are reluctant to accept foreign goods, and the company requires promotions, marketing slogans, and staff training. Slogans used should not conflict with their beliefs. Staff training helps the marketers understand the culture of the locals to avoid conflicts due to different perceptions. Female marketers have to engage with the male citizens differently compared to the male marketers. Effective communication requires empathy. The two parties must try to understand each other’s ideas, feelings, and experiences. The Chinese people may be reluctant to share their id eas, expectations or feelings with the Americans. The company will therefore take long to understand the customer expectations, and the products will take long before market establishment. Cross cultural ethical differences have significant impacts on marketing. Gift giving in china is a sign of respect and business etiquette. The gifts however require careful choice to avoid influencing the decisions of the recipient. In such cases, the gift is considered as a bribe,