Economics of exchange rates Essay Example | Topics and Well Written Essays - 1000 words

Economics of exchange rates - Essay Example Operating under such a business scenario is too risky for any business. This is because, regardless of how much sales a business makes, and regardless of how much a business tries to minimize its costs and expenditures, it will always find itself on the receiving end, where its performance is not dependent on its efficiency or effectiveness but rather on the behavior of the foreign exchange markets (Sarno & Taylor, 2005, p. 83). XJP receives virtually all its supplies directly from J&J Ltd, which, in turn, invoices all the costs and expenditures in Euros. On the contrary, XJP makes its sales in Chinese Renminbi. Therefore, it has to convert the income made from the sales from the Chinese currency into the Euros so that it can submit its payment to J&J Ltd. This means that the amount XJP pays to J&J is not solely dependent on the value of the supplies it receives from this company, but also on the rate at which the Chinese currency exchanges for the Euro.... However, if the foreign currency gains over the local currency, XJP will be forced to pay the cost of supplies at higher costs. This will in turn reduce its profit margin (Moffett, Stonehill & Eiteman, 2008, p. 254). Therefore, system through which XJP and J&J structure and manage their currency exposure is not suitable for the business, since it influences their performance and growth negatively. This is because, even when they apply suitable strategies to grow their business and increase their profitability, it is not possible to achieve their targets, since the target will always depend on the exchange rates (Sarno & Taylor, 2005, p. 90). Therefore, the most suitable way for them to structure their business is employ a system that allows XJP to purchase and pay for its supplies using the local currency. This will serve to remove the uncertainty involved in the operation of the foreign currency markets, making it possible for the business to Strategize on improving its profitabilit y and consequently achieving the desired growth (Coyle, 2000, p. 41). Case Question 2: The situation in which XJP finds itself is very different from that of other foreign subsidiaries owned by J&J worldwide. This is because, while the other foreign subsidiaries are decentralized, allowing them to take responsibility of their own structure from top to bottom, the case is different for XJP. The organizational structure of XJP is characterized by a lot of control from its parent company. Thus, XJP is not capable for planning and procuring its own supplies, inclusive of the raw material, but instead depends on J&J to supply it accordingly (Moffett, Stonehill & Eiteman, 2008, p. 255). This arrangement might be beneficial for enhancing

The National Plan of Action for the Garment Industry of Bangladesh Essay - 145

The National Plan of Action for the Garment Industry of Bangladesh - Essay Example The two incidences triggered protest that facilitated the implementation of the Multi-stakeholder Accord on Fire and Building to boost the corporate environment and offered new dimensions in the occupational safety, health, and environmental reporting of the firms in Bangladesh. Besides, the disasters enabled the adoption of the National Tripartite Plan of Action (NTPA) at the local, regional, and international platforms (Khan and Wichterich 11). The Accord and NTPA offered the platform for collaboration of the stakeholders towards enhancing the safety of the workers. It is in this regards that Khan and Wichterich aimed to assess the level of implementation, achievements, and possible hindrances towards the realization of the objectives. Immediately, the NTPA and the Accord attracted public admiration, and the implementers strived to attain the goals. Some of the primary initiatives comprised corrective action plans, capacity building, and inspection of the facilities. Despite the advantages of the strategies and great anticipation, the strategies have no noticeable impacts. The findings indicate the presence of the gendered prejudice and the associated mishandling of the workers according to their genders. It also shows that the labor power and collective bargain is in the preliminary phase. However, the findings evidence significant progress to advance the occupational health and safety. Predominantly, the findings indicate a clash of power negotiations in the global apparel chains with a particular focus on the RMG accumulation (Khan and Wichterich 36). Given the magnitude of the responsibility and public expectations, the study realized minimal advancement that raises issues about the seriousness of the target ag ency and stakeholders. The responsible institutions and stakeholders lost focus and the associated power structures hinder the realization of the goals.