Importance of Innovation Strategies in Organizations

Modern Management Concepts

Concept of National Innovation Systems

International Business

Case Study: Henry Ford’s Contributions to Organizational Behavior and Leadership

Management Case Studies

De Bono’s Six Thinking Hats: A Creative and Critical Thinking Model

Human Resource Management

What Is a Contact Center and Its Role in the Customer Journey?

General Business Articles

Internal Strategies for Managing Forex Transaction Risk

Transaction risk arises from executed contracts resulting in Forex payables or receivables in the future. The domestic currency value of these payables or receivables at current exchange rate and at future exchange rate is expected to be at variance, resulting in transaction risk. The forex transaction risk can be hedged using internal strategies. Internal strategies refer to strategies that are internal to the firm and its affiliates. These are “home’ arrangements. The counter party to the transactions may be involved. But third parties are never involved.

The different internal strategies used for managing forex transaction risk are:

  1. Risk Netting: This strategy involves matching forex receivables in a currency with forex payables in that currency.
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Abey Francis

Exchange Rate Determination Models

Determination of the exchange rate is as simple as the determination of price of any commodity or product or service. Only thing, here the commodity itself is one currency, so price of one currency in terms of another is required. But the caveat is determination of price of any commodity/product/service is not that simple. The determinants of the exchange rate are too many to consider. Yet certain macro variables would capture the same.

Flow models and asset models are used in exchange rate determination. These are explained below:

1. Flow Model

The flow model of exchange rate determination simply is based on demand and supply of Forex.… Read the rest

Abey Francis

Global Strategic Rivalry Theory of International Trade

The Global Strategic Rivalry Theory of international trade was developed in the 1980s by such economists as Paul Krugman and Kevin Lancaster as a means to ‘examine the impact on trade flows arising from global strategic rivalry between Multi-National Corporations.’ It explores the notion that in order to stay viable, firms should exploit their competitive advantage globally and try to keep it sustainable. According to this view, firms struggle to develop some sustainable competitive advantage, which they can then exploit to dominate the global marketplace. Like Linder’s approach, global strategic rivalry theory predicts that intraindustry trade will be commonplace. It focuses, however, on strategic decisions that firms adopt as they compete internationally.… Read the rest

Abey Francis

Trade Theory of Independence, Interdependence and Dependence

Independence — Interdependence — Dependence Theory of International Trade tries to read trade patterns and policies of countries based on their degree of independence or dependence or interdependence on rest of the world. See this is a continuum: Independence — Interdependence — Dependence. The polar extremes are Independence at one pole and Dependence at the other. Independence stops trade, while dependence boosts trade.

  1. Independence: Independence is being self-reliant. Well one cannot be self-reliant. Yet one country may choose to be independent and the cost of such obstinacy is self-denial of life’s luxuries, comforts and necessities that can be afforded without difficulty.
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Abey Francis

International Trade Theory of Country Size and Technology Gap

Trade Theory of Country Size

Country size has some definite relation to international trade as to what is traded, how much is traded and so on. The classical trade theories do not go into country-by-country differences in size to deal with the lines of specialization. When a small and big country are involved, the small country may be pushed into specialization, but not the big one for all its need for the other product can’t be produced by the other small country, nor that small country take all export surplus of the big nation resulting from specialization. Thus a nexus exists between global trade and country size.… Read the rest

Abey Francis

Country Similarity Theory of International Trade

Country similarity theory was developed by a Swedish economist named Steffan Linder. Country similarity refers to what? Is it similarity of location or culture or political/ economic interests or technological capability (that is acquired advantage) or natural advantage or lack of it? Traditional trade theories speak of difference in demand or supply conditions or both as a necessary condition for trade between countries. That is, the traditional trade theories are built upon differences. But the country similarity theory is built of identical features of nations in trade. 8 out of top 10 trading partners of the USA are developed economies.… Read the rest

Abey Francis