Question

1. What are the principal cultural and behavioural differences that international financial managers need to take account of, in terms of both how these differences impact the conduct of business and how managers should deal with them?

2. Examine the view that it is the lack of understanding of the different ways exchange rate changes impact a business and of how the different forms of currency exposure are interrelated that prevent its effective management and then review which are the most appropriate tools and techniques to manage the different exposures that businesses face.

3. Explain why both effective international pricing and working capital management are crucial. What does the international manager need to do both alone and in conjunction with managers of other business functions, such as marketing, human resources, and operations, to effectively manage these areas?

4. In what ways is appraisal of investments with an international element more difficult for the financial manager to deal with than domestic investments with no international implications? How is such an appraisal complicated by it being a joint venture or one in which there is a minority interest?

Answer 1

1.There are various principal, cultural, and behavioral differences into different International markets as they are based on various different cultural beliefs and financial manager should always be incorporating those belief into his overall strategies in order to maximize from the behavioral pattern of different investor into International markets.

Principal differences which should be taken account of by different International financial managers are fundamentals upon which a nation is built into and the diversity of its culture and beliefs of its people must be respected and it should be incorporated into the business strategies in order to gain most from it.

Cultural differences which should be taken into account by fund manager are various ethics and cultural beliefs along with the nature and fundamental beliefs of various societies and it should formulate its product in such a way that it does not hurt the cultural sentiment.

Behavioural differences must be accounted into the business strategies by international financial managers as various countries are known for different type of behavioral reflection and its people are used to following certain kind of behaviour patterns like they might be aggressive or they might be highly defensive in nature so a business should be built upon such products that capitalise upon their behavioural Differences.

So a financial manager should always incorporate all the factors into business to gain maximum out of these differences.