Risk management in a multinational corporation

Type :

Term papers

Pages :

18 pages

Format :

.doc

Published date :

03/12/2009

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Summary :

 
 

Table of Contents Risk management in a multinational corporation Table of Contents

 
  1. Introduction
  2. The concept of RISK
  3. Translation Exposure
  4. Transaction exposure
  5. Managing transaction exposure
  6. Managing translation exposure
  7. Foreign exchange risk and economic exposure
  8. The economic consequences of exchange rate changes
  9. Bibliography

Abstract

MNCs are coming up in huge numbers nowadays. To earn the profits with minimal amount of risk has been a matter of concern for the investors. For this purpose management of risk is a very crucial factor. Pertaining to this context, this project has been undertaken with an objective to study the risk management strategies that can be used by MNCs. The various risks faced by the MNCs have been mentioned and the ways to manage them have been depicted in the project. Exchange Rate risk is one of the Major risks faced by MNCs. A multinational corporation is a large business organization whose operations extend across international boundaries.Location-specific advantages include location-specific natural resources, manmade resources, low taxes; low wage costs, high labor productivity, or state supported monopolies Location-specific advantages can lead to sustainable competitive advantages. Ownership-specific and location-specific advantages by themselves are not sufficient to ensure the success of the multinational corporation over local firms. Market internalization (I) advantages accrue to the multinational corporation as it exploits its ownership- specific advantages in local and international markets.

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