Managing An International Company Is Not An Easy Decision Essay

995 Words Sep 18th, 2016 4 Pages
Managing an international company takes an extreme amount of research, knowledge, and patience to be successful. Deciding to go into business in a country is not an easy decision, not only does the management team need to know how to manage the foreign currency exchange, but what factors could affect the rate to fluctuate. Some of those factors that would affect a country’s risk would be economic, political and financial system risk. Economic risk is how the country is able to pay back debt. A country with a strong economy should be in a stable financial situation. Political risk is dependent on how political decisions are made within the country. Financial system risk can be affected by both the economic and political risks (Perry, n.d.). By looking into five countries, a correlation of how the risk factors affect exchange rate,
Japan is a country that is a low risk country according to A.M. Best Rating Services. Japan is a conservative country, in that they take very little risk. The conservatism is holding the country back, in that the majority of the population does not invest their money in the stock market, they have their savings in low interest bearing accounts. By doing this, they are not saving enough money for when they retire (Iwamoto, Kawano, and Clenfield, 2012). The country also has lifetime employment, there is a loyalty between the employees and the employers throughout Japan. If the economy takes a downturn (which it has in Japan), the company…

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