Mustika Ratu Case Summary

Mustier Rat's Marketing Strategy Throughout the sass, the company expanded its line traditional cosmetics (facial care & decorative makeup, hair and body care product) and the established itself as the uncontested market leader – by 1998, four out of very 10 cosmetic products sold in Indonesia were Mustier Rata brands. Positioned as competitively priced, quality products formulated specifically for Indonesian skin. Company literature reinforced that its products were natural and integrated timeless Indonesian beliefs of the health and beauty properties of local plants and herbs.Mustier Rat's Jambs appealed to several market segments. Segment : Men, women, adults, and teenagers. Target : Predominantly middle- to upper-middle-income cue insurers. Positioning : Products were natural and integrated timeless Indonesian levels of the health and beauty properties of local plants and herbs. Condition of competition in the jam segment was becoming fierce in the next following years. Ma ny roadside stalls selling jambs to cure headaches, boost sexual drive or to reduce weight were common. These jambs were targeted at the middle- to lower-income market segment.So, Mustier Rata also competed in these market segments with their flank brand â€Å"Garage Jambs†. According to the company's 1 997 annual report, this line â€Å"contributed to overall profitability and had great potential for future growth. † Exhibit low are Mustier Rat's product differentiation based on market segment. Each segment has each marketing strategy that suitable to applied to their market. Based on reading text, Mustier Rat's core value that become major quality of Mustier Rat's product was high quality of their natural ingredients.It become a competitive factor for Mustier Rata differentiation to another brands. This competitive factor that Mustier Rata tried to sell from their marketing campaign. This became a major focus in the company's marketing communications. An average of o ver 25 percent of annual net sales was spent n marketing campaigns which promoted value-priced, natural alternatives to imported cosmetics. Another key promotion activity that increased the company's profile was sponsorship of several major beauty events, including the Miss Indonesia pageant.B. R. A. Immorality's high profile as an owner of Mustier Rata, who granted meritorious achievement in the promotion of Indonesian culture and traditions and the Asian Institute's Marketing Management Award (in 1992 and 1 995) also increased Mustier Rat's profile in domestic area. Mustier Rat's Distribution Strategy Over the years, Mustier Rata had developed its own well-established and highly organized distribution system, controlled through a recently installed information technology (IT) control system.The application of improved IT control systems ensured a higher level of service and more efficient delivery schedules as well as more accurate and timely consumer information. IT system was al so installed due to the the challenges posed by Indonesian geography, which is Indonesian area is so vast. Another significant challenge in distribution in Indonesia was the highly fragmented nature of the retail industry – thousands of small outlets and roadside stalls accounted for a significant percentage of Indonesian retail activity.Mustier Rata used all of kind distribution channel to market their extensive product lines. Mustier Rata Brand's Distribution Channel ‘ Lower- and middle- income brand : ubiquitous stalls, wet markets, conventional retail shop, supermarket, direct sales channel Upper- income brand : Department stores, company-owned stores, direct sales force Since 1 992, Mustier Rata had concentrated on intensifying their department store distribution channel.Another key strategy was to increase of distribution channels previously managed by third parties in their most densely populated and lucrative markets. The establishment of Mustier Rata-owned and operated distribution systems resulted in an average of two and one-half percent increase in Mustier Rat's operating margins. Delivery time was also shortened, and quality of service provided to retail outlets was enhanced. Company also changed its accounts receivable policy, shortening the due period from 90 days to 30 days.Namely it addressed lead times and resulted to smaller order lots. According to Essayist on the reading text, the company's distributors were his â€Å"eyes and ears† monitoring customer opinion and relaying vital market information to the corporate marketing department. Mustier Rat's International Market In international markets, Mustier Rata used a combination of in-house owned operated distribution channels, as well as contracted distributors.Malaysia The company's most significant international market, accounting for 70% of international revenue. 1 995, Mustier Rata established several â€Å"House of Mustier Rata† treatment centers, which resul ted in doubling sales. Target Market : Indigenous Malay (properly target), Chinese (lasted catered), Middle market products. Philippines : Demographics in Philippines market were relatively similar with domestic product lines. Target Market : Health and beauty products for teenage girls was one of the least crowded market segments.Next step in penetrating the Filipino market was to capitalize on the established third-party distribution channels used for the body splash and to introduce other product within the Putter line as well as Mustier Rat's slimming Tea. The Middle East : Mustier Rata had opened 14 â€Å"House of Mustier Rata† outlets in United Arab Emirates, Saudi Arabia, and Egypt. Target Market : Brand with in developing natural products that adhered to the Muslim ‘Hall' standards -? products made with no animal fat and that had never been tested on animals.Other Countries : The another countries was : Hong Kong and Holland (Mail order distribution channel) Sou th Africa, Canada, Australia, China, Japan, Korea, Vietnam Taiwan, and Thailand (Investigating Market) Successfully Navigating Through A Chaotic External Environment Mustier Rata had averted the misfortune in 1 998 that had befallen many of heir competitors through cautious investment of the proceeds of their PIP (much of which had not been used as originally planned), mostly in short term deposits at foreign-owned banks.

A Knights Tale

a knights tale [pic] â€Å"A knight’s tale† is a movie that was based in the medieval time. The movie focussed on jousting and gives us an outlook on medieval time. This essay about the movie will explain what is fact or fiction. The topics that will be covered are; songs in the movie, Dancing, jousting, transport and hair style. Hair styles in the movie are like some of them from the medieval times but most of the hairstyles in the movie are modern hairstyles.Such as, people in medieval times use to were these head dresses and they couldn’t dye their hair all these different colours like modern day people can because they didn’t have the materials to dye hair. Music in this film was modern, an example includes the song ‘we will rock you’ by Queen however, in the proper medieval times music was played at dinner time and at parties. They used to play little songs about kings and adventurers.Jousting in the medieval time was pretty dangerous and when you fall off the house the jouster’s would have to sword fight till one of the knights would yield but in the movie the characters just kept jousting until one of them got hit off the horse then the other person won the tournament or every time one of them got hit one of the people put a stick in with a white bit of cotton In this wood thing so u could keep score of how many times they got hit and if they get to 5 the guy that hits the other dude 5 time wins.In the movie a knight’s tale at the start they were on a boat that was connected to a chain an people on the other side of the river were pulling the chain to make the boat come across the water but in medieval time they would have used ores to paddle across the water instead of peasants pulling the boat/ barge and only rich people have horses because they cost a lot. Most people in the medieval times would wear woollen clothing with ndergarments made of linen. Brighter colours better materials and a longer j acket length were usually signs of greater wealth. But in the movie clothing was a bit modern that they made look like it was from back then. In conclusion the movie a knight’s tale was mostly a fairly modern movie with a bit of real things that did happen back in the day like getting hanged and locked up in cages and there was jousting, sword fighting and some other things like that

Situational Leadership in Organizational Behavior and Relationship Management

SITUATIONAL LEADERSHIP AND CONTINGENCY THEORIES Executive Summary This ensuing essay is a formal discussion on the need for leadership change based upon continuously evolving situations in modern day conglomerates . The introduction summarizes situational leadership followed by a critical analysis on the same. The latter presents various leadership styles which are respectively applied in specific types of situations and tasks. Recommendations are provided at the end along with the conclusion.Introduction The present day conglomerate story is strewn with complexities which are hard to define or comprehend . At the center stage of such complexities is the concept of staff welfare. Being the most significant connection between the company and the customer , successful employee relation is the cornerstone that every corporate wants to excel at . The way in which staff relate to clients is of paramount importance as ‘customer delight’ is a direct resultant of the same .Hence modern day literature on leadership has devoted considerable focus on comprehension of different leadership approaches adopted in specific sorts of situations. Better or worse employee management skills is the key differentiating factor as far as profitability gaps are considered. In the following writings, we try to evaluate the various concepts which provide us a detailed evaluation of staff management issues and application of the latter in present day management policy. Critical AnalysisWe are confronted by a scenario in which a manager at a particular company is conducting a meeting with his one downs. The number of such people is 10. The staff are disgusted and flabbergasted at the heinous manner in which senior management has been treating them. The manager overheard certain staff comment that they felt like ‘cogs in a machine’. However in the other divisions of the company , the situation is not as grim and staff are given their due recognition and respect.Henc e came in the need to preach and practice ‘situational leadership’ which would help in erasing such differentiated inter departmental behavioral patterns. But another manager by the name of William is completely averse to such idea and feels that employees should be thankful for being hired, in the first place. Wage income earned by the staff is their means of survival and provision of the same by the company entitles the latter to put in place tough work standards that need to be complied with .Thus arises the paramount importance which needs to be attributed to the concept of situational leadership , since the latter is the most effective tool which can bring an end to rigidities in leadership behavior that will ultimately see a contented workforce delivering on higher efficiency and productivity . Literature on leadership has been focusing more and more on a situational theme rather than the more traditional dictum of a traditional kind. The situational approach is f lexible and adaptive in character as opposed to the traditional variant that kills innovative thought in management.Leadership styles can be differentiated as – coaching , affiliative, commanding, pacesetting , visionary and democratic. A forward looking leader is one who appropriately adopts one or more of such styles depending upon the task and occasion in question. Goleman along with other colleagues, is of the belief that employee engagement and performance drive of the greatest magnitude can be achieved if one has a cautious concoction of the visionary approach, coaching, the affiliative approach and the democratic approach.Post the Goleman era ,further inroads into the phenomenon of corporate leadership suggest that leadership cannot be effectively defined by any one single approach . On the contrary , multiple styles describe leadership and such styles are contingent on varying situations. Thus came into existence, ‘contingency theories’ on leadership whic h elaborated on the adaptation of management styles to the requirements of a specific situation, group and the manager’s own personal values. We now make a humble attempt to investigate some of these theory hypotheses : )Fiedler’s contingency theory : During the course of his study on contingency theory literature between 1964 and 1967 , Fred Fiedler tried to establish the linkages between the leadership style and performance of a group , in changing situational circumstances. In his opinion , three basic situational variables alter the extent of ‘favorableness’ of a situation when we consider a leader: (i)Leader-Member connect in respect of trust ,confidence and respect. (ii) The definition and overall purview of the task in consideration. iii)The amount of leadership control exercised by the leader over his sub ordinates. ‘Very favorable’ or ‘Very unfavorable’ situations called for an authoritarian(task oriented) fashion of lead ership. On the contrary ,when unstructured tasks were investigated upon, low leadership control and good leader-member relations marked a ‘medium favorable’ situation . This situation would be best supported by a democratic (relationship oriented) style of leadership. However a standard criticism of this model, is the fact that the favorability variables are mostly qualitative in nature and difficult to be estimated.Also the least preferred co-worker(LPC) scale formulated by Fiedler to determine leadership patterns, with the help of a lucid questionnaire asking leaders to specify the individual they collaborate least with , in terms of sixteen extremes ,has been under the scanner in terms of the rationale . Studies concerning the LPC scale have elaborated that LPC scores of a particular leader can vary , thus not providing any conclusive evidence of leadership pattern. Nevertheless, Fiedler’s work has to be viewed as a catalyst that encouraged further studies in the contingencies of leadership. )Path-Goal theory : The Path Goal theory is a far more empirical research model on the concept of contingency theory . It was formulated as a correction to the previous Ohio State studies which presented the fact that though successful leaders tended to be optimistic with both the initiating structure and consideration sets of leadership, there were exceptions. The basic ground to this model is expectancy theory . This theory claims that definition of an unambiguous path to a particular achievable situation could act as a tool of motivation .But if such path is already chalked out, additional inputs from the leader to his one downs could be felt uncalled for and thus satisfaction with the leader would diminish. Thus higher consideration results in higher satisfaction in case the staff works on repetitive tasks and aiming to initiate structure gives greater results in ambiguous work situations. The Path-Goal theory of leadership has not been without i ts share of critics. Having predicted resultant scenarios of different task structures, it has also beeped upon inconsistent research outcomes.Apparently, such theory gives one greater insights in predicting leader-subordinate behaviors rather than leader-peer interactions. c)Life-Cycle Theory : A more relevant and present day theory of contingency which considers the points discussed till now and puts gives them a shared common perspective is the Life Cycle model. This theory was presented by Paul Hersey and Ken Blanchard , rests on three key variables – the amount of task-orientation that a leader exhibits , the amount of relationship-orientation along with the quantity of willingness that the staff throw out in the course of the task implementation.These variables combine with the historical and present performances of the sample staff as comprehended by the leader and also the interactions within their own selves are combine in order to determine the appropriate leadershi p style. The most interesting result of this model is that a particular leadership trend can come out (sometimes over a finite time horizon) hence pointing to a clear developmental phenomenon ,given delegation of decision-making and responsibility to seasoned team members .However ,the outcome is opposite in cases where leaders maintain great concern for tasks as well as employees. The above model has often been criticized being a ‘post hoc ‘concept ,unable to be utilized as a predictive framework. Thus the need for change in leadership We have argued in the preceding section of the essay using various models of contingency theories that there is in fact an imperative need for changes in leadership styles, according to varying situations.William, who in this write-up is all for an autocratic mode of leadership, has not considered certain pertinent issues that creep up silently when such style is enforced. Staff become scared and tense , dependency on the supervisor incre ases manifold , morale takes a bad hit and absenteeism at work increases. All of these result in low productivity levels and the organization faces trouble. Thus there is a strong requirement for this particular organization to have situational leadership in place , argues our pro-change manager.A democratic style should be used when the management wants staff to be participative in decision-making and problem-solving. Complex issues require diverse formulation of ideas and the latter is possible only if staff are encouraged to join in the related discussion forums. Such opportunity also provides the staff to form a greater sense of belonging , personal growth and job satisfaction. A ‘laissez-faire’ or a ‘hands-off’ mode of leadership is also effective at times when the sub ordinates in question are highly skilled , perfectly trained and well educated.Trustworthiness and self-pride in tasks undertaken are two important attributes which the staff should poss ess ,to make such style a success. We can also talk of the pacesetting or transformational leadership style that forms and retains a context which brings out the best in sub ordinates hence optimizing human and organizational competencies. This approach also helps in bringing about transformation at multiple levels and aligns staff with certain core values along with a common purpose.We can note from the above arguments that one particular leadership style is rarely effective in managing the present day complex corporation and we must adopt a mix and match of leadership styles in order to bring out the best results in terms of staff productivity and efficiency. Leadership needs to change Cautious self-probe and the ability to change given behavioral traits are key in being successful in altering a particular leadership style . Acclaimed leaders are usually the section of people that have managed to do so.We can elaborate on some ways in which the leader can alter his management meth ods: a) He should ask for quality feedback from his team of sub ordinates, such that he understands their unbiased response to the effect of his style on them , on his specific department as well as on the company at large. He should be able to accept truthful answers on his face and should refrain from being offensive at certain responses . Honest feedback by direct sub ordinates is one of the most relevant tools , that informs the leader of areas of improvement and helps him in changing his management style. )Small changes in leadership style should be brought about at the initial stage as opposed to swaying changes since the latter would sweep the staff off their feet. Influences to changes in leadership Some particular factors have a telling effect on leadership styles. These can be enumerated as follows : i)Positive office environment ii)Promoting creative thought iii)Low staff churning ratios iv)Staff Skill set v)Probing and Decisiveness vi)Managing , encouraging and rewarding performance viii)Team work ix)Deveolping both self and team through extensive quality tranings )Client Focus APPEALS TOWARDS CHANGE â€Å"The world as we have created it is a process of our thinking. It cannot be changed without changing our thinking. †Ã‚   ? Albert Einstein Conclusion: We have established with the help of the above essay that changes in leadership styles are quintessential to management today and if such approach is adopted we would see productivity and efficiency increase manifold . Recommendations: Thus it is strongly advocated that corporations instruct and encourage managers to participate fully in situational leadership styles.Democratic style of leadership appears to be the best option in most situations. References: A Primer on Organizational Behavior; Bowditch, Buono, Stewart Seventh Edition, Pages 220-226, Leadership Styles;www. unpan1. un. org retrieved from unpan1. un. org/intradoc/groups/public/documents/unssc/unpan024704. pdf, How To Change Lea dership Style; www. ehow. com retrieved from www. ehow. com/how_7579100_change-HYPERLINK â€Å"http://www. ehow. com/how_7579100_change-leadership-style. html†leadership-style. html, Factors that influence choice of leadership style; www. ukessays. com retrieved from www. kessays. com/essays/management/factors-that-influence-choice-of-leadership-style-management-style. php , Factors influencing leadership style; businesscasestudies. co. uk retrieved from businesscasestudies. co. uk/tesco/developing-appropriate-leadership-styles/factors-influencing-leadership-style. html#axzz2OyXVYv3j, Quotes about change www. goodreads. com retrieved from www. goodreads. com/quotes/tag/change On Managing People ;Harvard Business Review Press Pages 12-13 Leadership the Challenge; Kouzes and Posner Pages Third Edition Essentials Of Organizational Behavior ;Robbins and Judge Ninth Edition

Teen prevention of sex summary of past paper Essay

Teen prevention of sex summary of past paper - Essay Example The students were divided into two groups with one group participating in the sex prevention program and the other group merely exposed to traditional sex education. A questionnaire was distributed to the participants two years after completion of the program and following the conclusion of the sex education lessons at school. The results of the study indicated that the patterns of sexual conduct was vastly the same as between students of the different groups. The only difference in sexual conduct was observed between students who had subsequently dropped out of school and those who had not. In this regard, students who left school engaged in more risky sexual behavior than those who remained in school. The second journal article reviews was written by Sellars, McGraw and McKinlay (1994). In this article, the authors reported on a study in which the assumption that free access to condoms increased sexual promiscuity among teens was tested. The study was conducted with 536 Latinos between the ages of 14 and 20. The subjects were divided into two groups: one group had liberal access to condoms and the other group had normal access to condoms. The research study began by obtaining baseline information from the subjects with a follow-up interview three months later. The study conducted by Sellars (1994) revealed that 80% of all participants reported sexual contact after providing the baseline information. Sexual activities among females in both groups showed no appreciable differences, although frequency was higher for females in the group with normal access to condoms. Sexual activities among females in the group with liberal access to condoms revealed a larger propensity for multiple sex partners. Males reported less sexual contact among boys in the group with liberal access to condoms. Males in the group with liberal access to condoms also reported a higher risk of having

Windowsshopping at Zara Case Study Example | Topics and Well Written Essays - 1750 words

Windowsshopping at Zara - Case Study Example Zara is building on a vertically integrated demand and supply chain, while most other textile chains rely on outsourcing and cheap labour. Zara controls most of the steps on the supply-chain; it designs, produces, and distributes itself. (Rose 2001). Zara needs just two weeks to develop a new product get it to stores, compared with a nine-month industry average, and launches around 10,000 new designs each year. If a new design is not sold within a week, it is withdrawn from the shop and a new design is pursued. None of the designs stays on the shop for more than four weeks which encourages the shop's fans to make repeat visits. The business model for the company is based on offering the latest style in a high quality product at a good price. With a creative team of more than 200 professionals, Zara's design process is closely to the public. Zara pays special attention to the design of it stores, its shop windows and interior dcor, and locates them in the best sites of major shopping districts Zara's first outlet in Spain, the store was selling well designed clothes in a modern environment at a price anybody could afford. The in-store displays were kept minimal and the showroom was light and airy, with clean lines and white walls that act as a blank canvas for ad campaigns. Zara's window aimed at attracting the potential customers who will become the ultimate purchaser of the product. To induce them, the displays were made realistic in an expensive method to attract the onlookers. The consumers are made to repeat visits to look at the products displayed before they buy them, as few customers are impulsive buyers. As the customers have wide range of choice products with variable prices they prefer to go around the store to decide the purchase depending upon their budget. Window display and strategic positioning refers to performing different activities than the rivals or the same activities in a different way. While the display model used by Zara itself is often very easy to replicate, technology is essential to creating and enabling novel approaches to business that are defensibly different than rivals and which can be quite difficult for others to copy. Zara stores offer a compelling blend of fashion, quality and price offered in attractive stores in prime locations on premier commercial streets and in upscale shopping centers. The in-house design and production capabilities enable them to offer fresh designs at Zara stores twice a week throughout the year. In the early 1990's, Zara began formulating new type of design and distribution model. By that time it had opened up stores in countries like Europe and U.S.A. (Kotler 2008) Life like models dressed up in various costumes designed by leading fashion designers were kept in the window display. Zara's most unusual strategy was its policy of zero advertising; the company preferred to invest a percentage of revenues in opening new stores instead. The strategy has changed lately with yearly sales advertisements, together with targeted advertisements in papers. The latest technologies with innovations were used to lure the customer in the showrooms. (Barthes 1972). Figure 14 This picture shows the window display of the showroom in Oxford Street, London. It was taken in October 2009. The window display contains models wearing trendy clothes created by the leading fashion d

Using a range of company examples from global retailing, critically Essay

Using a range of company examples from global retailing, critically review the extent to which you think competitive advantage is due to the possession of unique resources - Essay Example Gaining competitive advantage by using the resources of the firm can include access to natural as well as other resources which can help organizations to stay ahead of the competition. This paper will discuss about four firms from retail industries and will discuss as to whether the competitive advantage possessed by each of the firm is based upon the unique resources possessed by them. By using different strategic frameworks and theories, this paper will focus upon how firms like Tesco, Carrefour, Wal-Mart and Aeon use their unique resources to gain competitive advantage and remain at the top of their industry. Frameworks and theories which will be used for analyzing the above thesis will range from Porter’s five forces model, Value Chain analysis, VRIO as well as Core Competences. By using these frameworks, this paper will analyze and explore as to how leading firms in retail industry has been able to use their unique resources to remain at the top of industry in which they are operating. Competitive Advantage is considered as the strategic advantage firms have over their competitors in the industry they operate. Achievement of a competitive advantage actually strengthens the position of a firm in the industry and business environment they operate. Competitive advantage theory suggests that businesses should produce and sell high end products and sell them at higher prices in the market. Michael Porter who outlined this theory suggested that organizations need to possess attributes or group of attributes which can actually distinguish them from others in the market. Competitive advantage is based upon the notion of resource based view which outlines that organizations can have certain resources which can actually distinguish from others in the industry. (Stalk, 1992) The resource based view suggests that firms possessing competitive advantage are primarily based upon the application of resources which are at the disposal of the firms. This

Summary of 3 articles , comparison and discussion Essay

Summary of 3 articles , comparison and discussion - Essay Example Big data is viewed as an effective tool to deliver projecting likelihood of an event and analyze patterns. The long run success of an organization is determined by additional of organizational asset with data and information. The topic provides vivid explanation about the broader application of big data in society and management research. It is believed that experiential study in management can often deduces relationships such as two companies can link through customer-supplier relations, or collaborates in production or compete in same market. In the era of globalization and technological advancement, it has become imperative for organization to manage its data and information in an effective way. The additional use of big data is crucial to exemplify the significance of the topic to organization like NHS trust and data management community. The survey conducted by American Management Association in the year 2013 reveals that the need of building analytical skills within the organization is critical for development (AMA, 2014, p.1). The organization selected for analyzing and researching is the drawback of data management is National Health Service trust. The trust serves either on specialized service or geographical area. The NHS trust provides varied range of specialist and general services to patients. The new sy stem is being introduced to serve patients and maintain GP records. The use of powerful technology and massive influx of data are two reasons to increase the future use of big data in NHS trust. The three literature sources provide vivid explanation about big problems, opportunity and harness of big data. These articles discusses that firms enjoying success are able to implement big data to create new businesses and improve their existing trades. This rapid alteration results in authority shifting to decisions and analytics experts are

Hard news Essay Example | Topics and Well Written Essays - 1500 words

Hard news - Essay Example â€Å"I use acrylic paints because they are versatile, available in many shades, blend well and can be mixed with glazes or pastes for different effects. As I work fairly quickly, they are more suited to my style,† he says. â€Å"Angony is very quick when he works and he doesn’t like to be interrupted. I think that is why he doesn’t usually like to have people around while he’s ‘in the zone’† says neighbor Sheila Creeley. â€Å"But sometimes you’ll notice the green hat you were wearing or that thing that you were doing in one of his next paintings.† Primitive art recognizes that the underlying elements of human emotions can be deeply expressed through the colors and lines of the work more than the symbols and forms found in the image. By de-emphasizing focus on the image and channeling the emotional experience of the moment, primitive artists attempt to bridge any emotional distance introduced through cultural or social differences of symbol interpretation. This concept is perhaps best expressed by the words of Jean Francois Lyotard in his 1984 book The Postmodern Condition when he describes the process as an attempt â€Å"to make visible that there is something which can be conceived and which can neither be seen nor made visible.† This element is most often referred to as the sublime. For many artists, such as Angony, this sublime element is recaptured to the highest degree through the sense of wonder and imagination typically found through the focus on ‘primitive’ geometric forms. The movement toward primitive art was started by Pablo Picasso. As artists concentrated on the essence of the experience of the art and its creation instead of the symbolic form, they discovered that emotions were generally felt the same universally even when technical elements such as symbols, shapes or colors were understood differently by different cultures. This meant that the

Wireless fan LLD Essay Example | Topics and Well Written Essays - 1500 words

Wireless fan LLD - Essay Example This document will also document the hardware and software which will be employed. In this document, the researcher will discuss all the components that will be on the board as well as the software of the microcontroller. The heart of the analysis will be dependent upon the IR remote Controller that involves a transmitter and a receiver circuit operation based on using infrared red rays as a medium of a wireless communication. As such, the device is used for all sorts of electronic devices like televisions air conditioners. The document is intended to capture and convey the significant design decisions which have been made in preparation for the development of the system being discussed in this document. The first process of the system will be the starter mechanism that is made available to the user via the buttons. When the button is pressed, the signal leads up the wire to the PIC. Once there, it is then translated via the logical inputs and given to the microchip unit through the diodes. This output signal is served to the IR LED’s through the current limitation resistors; where the electrical signal is changed to an optical signal. At this point, the motor will start. There are three additional switches which are designed to alternate between fan speeds. The microcontroller is a device that connects to the computer PC. It is incorporated into the electronic board and contains a memory, processor core, and a programmable input/output. This is therefore used to program the PIC of the remote and the receiver by use of the assembly language. The IR Receiver is to receive the infrared (IR). IR receiver detects infrared light that is being projected from the transmitter. By using an infrared signal to maintain a charged capacitor, this in turn keeps the run relay ready. The motor itself is the machine that converts electrical energy into mechanical ability to complete the work; for instance, the electric motors used to run

Polymers Essay Example | Topics and Well Written Essays - 750 words

Polymers - Essay Example Among the naturally-occurring polymers are cotton, silk, cellulose, proteins and DNA, natural rubber, and amber whereas those of synthetic polymers are nylon, polyethylene, polyester, Teflon, epoxy, synthetic rubber, silicone, polyvinyl chloride (PVC), and neoprene. As covalently bonded structures of macromolecules, polymers can be modified and be formed in chains that are linear, branched, cross-linked, or networked. Like any other molecule or substance with certain characteristics, a polymer bears properties specific to its own composition and nature. Polymeric properties have been determined based on the identity of constituent monomers, the arrangement of these monomers along with repeating units into a ‘microstructure’ within a polymer, the phase behaviour, the polymer morphology, as well as the mechanical and chemical properties of a polymer. Critical to the understanding of the morphology and phase behaviour of polymers is the temperature, for the degree of crystallinity of a polymer is a function of temperature so that through temperature variation, one can decide when a polymer becomes either crystalline or amorphous. A polymer transitions from a crystalline phase to an amorphous phase upon reaching its melting point. At high temperatures in which polymers behave as viscous liquid, thermoplastic polymers soften unstably while thermosetting polymers harden permanently where thermosets, such as epoxy and polyester, are found to be more brittle and dimensionally stable than thermoplasts, like polyetheretherketone, upon heating. During cooling period, however, a polymer transforms from a rubbery-viscous liquid phase to an amorphous solid phase, deforming elastically at low temperatures. Adjusting the temperature affects the modulus of elasticity of a polymer such that a range of polymeric material – whether viscous ,

Effects of Education Essay Example for Free

Effects of Education Essay Education is an act of learning which enables one to realize his or her full potential and know areas that one is talented in order to exploit them[Grusky, 2001]. Education basically entails impacting of knowledge to individual. Social inequality on other hand is lack of basic necessities in life example access to health care and employment opportunities and others. Those individuals who are socially unequal with others are excluded form full and equal participation from what is important is one’s social life. Education has not had effect in increasing opportunity for all but instead it has reinforced existing social inequality. This is evidenced since one can only be educated on basic of his or her social class and their results to division between individuals, those who are educated continue to prosper while those who are not remain in poverty. It can also be evidenced in economic inequality since this is mainly as a result of social inequality. Economic inequality links with social inequality in that poor financial status hinders people from obtaining some education while some standards as others is , they cannot obtain the same housing, healthcare and also education. Lack of these basic necessities results to people living in the different classes to use different technologies according to their income. Socially education places people in different status which are mainly achieved through education because it determines over occupation which is the main determinant of one’s status in a community. In this, education brings about these differences since those who are educated bring up their siblings in the same status but for those who are not educated they cannot afford good education for their siblings. The position of a person in community can be determined by the social class one is in due to what he or she has achieved. This mainly comes in varying level of education that one has attained since those who are educated are employed and subsequently their standards of living are raised which make them different from common man who did not access education and therefore has not been able to achieve anything. People in different status are positioned differently in the society in regard to the way they can access different goods and services. Therefore the issue of education in status makes it clear that the social standards are very different between the education and those who are not learned because they have no opportunity to experience the high status of life. The difference brought about by effect of education on reinforcing social inequalities has resulted to basic life change. Such changes include physical health where by people don’t get access to the same health intervention which results in deterioration of health in those individuals who did not benefit from education. Apart from Medical intervention, learned individual have gained access to learning how one can live healthy, eat well to prevent diseases and they can readily access healthy product as compared to those who have no money nor basic education to help them overcome the poor health. The educated tend to keep the knowledge to themselves and help those who are also educated and leave the less fortunate to suffer with no =one to help them since they do not have money or basic education to help them overcome poor physical health. More also, social inequality brought about by difference in education background has brought about life change in psychological health in that those who are not educated have so many problems which keeps on torturing the affected person mentally. The psychological health can be brought about by depression or isolation from the others who consider one to be of low life since he or she has not gone through education system. Others engage in excessive drinking of alcohol and other illicit drugs which end up in destroying their mental capability which results to poor psychological health. In contrast social inequality comes in since those who are educated, even if problems comes their way they have different means of dealing with them and thus why they are always in good psychological health unlike the unlearned ones. Inequality can also be evidenced in basic life changes in food and shelter one uses. The issue of education does not benefit all since the educated can have good standards of life and live in good houses and eat better food than those who are not educated. These differences make people to have different social style since poor will only socialize with those whom they share the same social class with and the same applies to the rich. Particularly, social inequality comes in when one is wealthy which make them to use their money power to achieve various political powers but in contrast the poor remain poorer since they have no one to represent them due to lack of education. In other words education only benefits those who are educated but it’s not for all. The poor who are basically not educated, politically are much different from the uneducated since they are not equally represented which increases inequality in the society. Education has also brought difference in different racial; and ethnic group. This is because a different group views the value of education differently and the educated one continues to benefit while those who are not remain poor and poorer. Some groups values education while others do not which makes them to live in two distinct social classes. Their social inequalities are much strengthened by education since the educated and uneducated persons cannot interact freely. Also the level of education is different in different races and ethnic groups regarding to the way each group values the concept of education. Those who are learned can afford different technologies example the use of computer as compared to those who can not afford advanced technology and end up using manual methods to carry put their tasks. These differences makes individual not to interact freely with each other. Education has brought existing social inequality since it has brought difference in accessing job opportunities. Those who are educated mainly gets better jobs which distinct them from their uneducated counterparts who can not be offered the same job since they belong to different social class brought about by the level of education. Also operation of basic businesses requires educated individuals which entirely create a gap in operation between those who are educated and those who are not. The amount of wealth one has determines his social class which creates a gap between the rich and the poor. Those who are not learned are at a risk of social inequality since they lack access to basic education. This creates difference between the learned individual and therefore they can not relate freely. Socially these people are discriminated by those who are learned. Education has also brought about inequalities in goods and services taxes. During payments of these taxes inequality based on social class is evidenced since different individuals are taxed differently and in this, less educated may pay less taxes as compared to those who are educated since they have many assets as compared to poor. Sex and gender can also cause social in equality (Grusky, 2001). Many people view works differently and see to it that different jobs are for different sex. For example in most countries women are considered to perform domestic chaos while men go to work in offices. This creates inequality since even women can work in their areas and they should not be denied chance to work. Like in military jobs are viewed to be for men but in real sense even there are some women who can perform those tasks better than men. Geographical location of individual also matters since it depends on how those living in that geographical area view education and the impact it have in their lives. Citizenship is another factor since you find those living in different countries has achieved different levels of education which is different from each other. Their differences shows that the two groups cannot interact freely which brings about social inequality. Social inequality can Stimulate social conflicts and lead to political instability. People of different social background do not interact freely and incase of political instability you can see the two groups fighting. These social inequalities can result to family violence and breakups and this is evidenced when one is more educated than the other and therefore they share different social background. They can also stimulate street crimes whereby some people see to others as more advantaged than others since may be they are looking for jobs which are not forthcoming due difference in their educational backgrounds. Therefore, they can end up fighting those who they consider their rivals. These inequalities can also result to hate- crimes where one consider another person as a hindrance to his or her success or may be you hate your parents since they did not give basic education which is much needed. Therefore education has effect in increasing opportunity for all can only be achieved if everyone has had access to basic education which can be used to unify everyone. Otherwise, for unequal distribution of education it results to social inequality which is the case in real life today. So education has reinforced the existing social inequalities because not every one has an access to basic education to give opportunity to all.

English Commentary - James Thurber Essay Example for Free

English Commentary James Thurber Essay James Thurber’s â€Å"Footnote on the future† is a first person limited narrative written as an account of the author on the topic of science and the future. The piece is written with the aim of entertaining the reader; many elements in it – comedy, colloquial and conversatonal language, irony, personification and unusual imagery reflect this unified effect. It is important to remember that although the author criticises scientists, himself and the human race in general, he does so weakly and in an amicable and comical way. The theme of the piece is humour and this is achieved in several ways. One method used by Thurber is to include deliberately implicitly sadistic ideas into the piece. Thurber writes as if he were disappointed when he finds out that â€Å"neither the sun nor the mind of man is, after all, going out. † This achieves humour because it seems as though Thurber is in opposition to mankind and its future even though he is a human himself. In addition, amusing and ridiculous personification is included in the text: the universe is said to have â€Å"quit shrinking†; Thurber wishes that Halley’s Comet â€Å"deals California a glancing backhand blow before it goes careening off†; the sun-spots spread as said to have been â€Å"spreading as rapidly as ulcerative gingivitis†. Humour is also accomplished by Thurber when he ridicules himself in the opening paragraph of the piece. Whilst attempting to make himself seem important and chiefly intelligent, he implies that information is delievered to him rather than searched by him as shown in the quote: â€Å"word is brought to me†. However, following on from this forementioned quote, Thurber reveals that it is his â€Å"pageboys† that deliver information to him. The fact that page boys do not normally deliver â€Å"information†, but instead deliver wedding rings to a priest, implies that Thurber may have mistaken the function of page boys and has therefore ridiculed himself in an attempt to seem intelligent. In terms of content, eccentric imagery is also used to simply achieve the reader’s attention. Thurber makes the reader to imagine Earth as a â€Å"flimsy globe† and then later to imagine it being knocked â€Å"far into the oblivious Darkness, the incomprehensible Cold†. This produces shock to the reader and in fact could be considered as ironic as it implies that Thurber does not believe in a religion; instead believes that the existence of the universe can be explained through science – something that he criticises throughout the piece. Thurber directs some attention to scientists and takes care to use the image of â€Å"bearded watchers of the skies† as a stereotype to describe them. Throughout the passage manages to portray scientists negatively through successfully (in his opinion) disproving Dr. Tilney’s theory, describing his frustration in the lack of certaintiy scientists have when predicting where and when a comet may hit Earth and commenting seemingly ironically that Time magazine is â€Å"always infallible† and. The use of irony is common throughout the piece. He comments that scientists are â€Å"quite naturally cheerful† even though â€Å"billions of unused brain cells have been detected in the cortex of man†. Thurber however gives no explanation for why the scientists are joyful. Thurber further incorporates irony into the text when he states â€Å"we were given only a few paltry aeons to prepare our species for the end†. As an aeon is considered a period of a billion years, it would be reasonable to think that there would in fact be enough time to be prepared for such a catastrophe; Thurber does this purposefully to criticise scientists’ perception of time. The reader’s attention is retained through a consistently colloquial and conversational use of language. Thurber refers and converses to the reader in second person when he says â€Å"the rest of you may go†, â€Å"you may all file out now† and â€Å"don’t ask me why, it just has†. The author also informally refers to the theory that man has many unused brain cells as a â€Å"little menace† and chooses to describe his age in 1910 as when he was â€Å"a stripling of sixteen going on seventeen†.

Evolution of Computer Technology in Last 25 Years

Evolution of Computer Technology in Last 25 Years The advancement of the computing technology could commonly identify in 6 generations. The physical size of the computers significantly decreased from the first generation vacuum tube computers to third generation computers based on the integrated chip technology. Fourth and fifth generation computer technology increased computer chips efficiency by developing the very large scale integration (VLSI) and ultra large scale integration (ULSI) technology. (Halya, 1999) During the fifth generation computing, the idea of using multiple computer chips to solve the same problem flourished, which was based on the earlier design of parallel computing that was developed during the fourth generation. With the improvement of hardware, increased network bandwidth, and developing more efficient algorithms, massively parallel architectures allowed fifth generation computers to increase the efficiency of computing significantly. (Drako, 1994) This research paper is mainly going to discuss how the comp uter technology evolved from the end of the fifth generation to current day sixth generation computers. The improvement in microprocessor chips technology allowed millions of transistors to be placed on a single integrated chip, which opened the generation of computers based on ultra large scale integration, or ULSI. The 64-bit microprocessor was developed during this time and became the fifth generation chip we mostly use today. Even the older fourth-generation chip architecture concepts like Reduced Instruction Set Computers (RISC) and Complex Instruction Set Computers (CISC) derived the benefit of ULSI technology. During the fourth generation period, microprocessors were commonly classified into RISC or CISC type architectures. The difference between RISC and CISC were very clearly distinguishable. RISC has a very simple set of instructions which required a low number of transistors but needed a higher memory to do a task. CISC has more instructions set available compared to RISC which required more transistors but less memory space. (Hennessy, 1991) Due to the limited computing res ources, each programmer decided the specific chip type to deliver the endstate the application delivery. However, with the advancement of microprocessors, the 64-bit chip now has more transistors and memory address access available for computing. Today, the need of differentiating what used to be two main categories of the microprocessor is almost pointless because of the level of complexity in modern day 64-bit chips for both CISC and RISC. Many new CISC chips behave like RISC with the increased processor clock cycle while the new RISC has increased number of instructions available like CISC (Cole, 2015). Two of the most important hardware techniques used to improve performance during the fourth and fifth generation of computer development have been pipelining and caches. Both techniques rely on using more devices to achieve higher performance. Pipelining might have been available only to some mainframe computers and supercomputers during fourth generation computing; however, the technique became very common within computer architecture during the fifth generation computing which became the baseline for the sixth generation computer which uses decentralized computing process to perform as an artificial intelligence and neural network computing. Pipelining improves the throughput of a machine without changing the basic cycle time and increases performance by exploiting instruction-level parallelism. (Hennessey, 1991) Instruction-level parallelism is available when instructions in a sequence are independent and thus can be executed in parallel by overlapping. Unarguably, the pipelining technology led to faster speeds and better performances but the hardware performance couldnt keep up with the demand of even faster hardware that could facilitate applications that required processing a large amount of data or critical commercial transaction very fast. Addition to advances in pipelining, the advancement in cache memory technology also significantly enhanced performance of how computer access data. By creating a small pool of memory either in the actual processor or very close to it decreased the need of frequent access of data directly from the memory. This technique made cache memories one of the most important ideas in computer architecture. (Uri, 2010) Cache memories substantially improved performance by the use of memory. Cache memories were first used in the third-generation computers from the late 60s and early 70s, both in large machines and minicomputer. From the fourth-generation and on, virtually every microprocessor has included support for a cache. Although large caches can certainly improve performance, total cache size, associativity, and block size all directly impact the performance and have optimal values that depend on the details of a design. (Hennessey, 1991) Just like microprocessor and pipelining, the cache technology improved significantly last two decades. Traditional cache architectures are demand fetch, cache lines are only brought into the cache when they are explicitly required by the process. Prefetching increased the efficiency of this process by anticipating that some memory will be used near future, thus, proactively fetched into the cache. Earlier of prefetching was either done through software or hard ware prefetching. As the complexity of prefetching increases, some more recent research has looked at combining the imprecise future knowledge available to the compiler with the detailed run-time information available to hardware like programmable prefetching engine consisting of a run-ahead table that populates using explicit software instruction. (Srinivasan, 2011) With such advancement in core computer technologies, the ability to process data and store information truly became increasingly decentralized. From cloud to PC over IP technology, cheaper storage, faster processor, and higher bandwidth wide area network allowed the modern day computer to work in collaboration rather than isolation. If from the first generation to the fifth generation focused on improving the efficiency of the hardware to meet demands of software engineers, the current sixth generation is more about how human interacts with the computers to enrich human lives. Computers became smaller while still sufficient to process necessary application by itself or using servers through the internetwork. Everything has become smarter, faster, smaller, and connected. With the improved network and parallel computing, the sixth generation computers definitely getting closer to simulate how the human brain functions. Using basic algorithms, probability and statistic, and economic the ories, new computer technology could simulate human-like decision-making process to improve human lives and help to solve more complex issues. In the sixth generation, we are actually experiencing the true potential of commercial Artificial Intelligence. References Cole, Bernard, (2015). New CISC Architecture Takes on RISC. EE Times, Retrieved from http://www.eetimes.com Drako, Nikos, (1995) . An Overview Of Computational Science. The Computational Science Education Project Haldya, Micky, (1999). Computer Architecture. Biyanis Think Tanks; Chap 5, 26 27 Hennessy, John L. Jouppi,Norman P., (1991). Computer Technology and Architecture: An Evolving Interaction.Computer, vol. 24, no., 18 29 Srinivasan, James R., (2011). Improving Cache Utilization. Technical Report; no 800., 31 35 Uri, Cohen, (2010). From Caching to Space-based Architecture: The Evolution of Memory. Enterprise System Journal. Retrieved from https://esj.com/

Getting Well at Get Well Essay example -- Medicine Physical Therapy Pa

Getting Well at Get Well In this ethnography I will take a look at the differences brought into my place of employment, a physical therapy clinic, which we will call Get Well. I explored the viewpoints of patients, therapists, and the physical therapy aides like myself on the issues of either the job or therapy. I wanted to get a look at the different ideas of patients and my co-workers because our age rages are so distinct. We treat elderly patients and students in junior high school. The different ages bring on different opinions of what therapy really is to some people. This is yet another example of how everyone has their own opinions and views on things. In the essay written by Kenneth L. Pike entitled, A Stereoscopic Window On The World, he explains the differences of etic and emic perspectives when conducting an ethnography. He states, â€Å"Different people may see the same event in different ways.† He explains this throughout his essay. As is my study my view as an outsider would be considered the etic view and the patients would be considered the emic perspective. Pike begins with an example of his own experience of interpreting situations with others. He and another woman had two opposite takes on the same situation. The essay then goes on to explain the difference in situations with reference to the etic and emic perspectives. Get Well is a fairly large facility located in a middle-class society mostly made up of Caucasians. This middle-class society is the small town of Romeo, Michigan. This clinic is located on Van Dyke Road between Thirty-one and Thirty-two mile roads. It is directly across the street from another physical therapy clinic whose patients always believe they are in ... ...hotherapy clinic rather than a physical therapy clinic. You have the young and old and all have similar problems, but yet they are so different. I sometimes get the impression that patients do no want to listen to me because I am so young. The young patients tend to take my instructions more seriously than the elderly do. They would rather hear it from the therapist himself. The major differences in patients’ attitudes all depend on their age. I enjoy working at the clinic because it is such a diverse place and not one day is ever the same. As I learned from my co-worker’s interviews just take everything with a grain of salt. Living with people’s opinions and attitudes is just part of our everyday life. Works Cited Pike, Kenneth. â€Å"A Stereoscopic Window on the World.† 23 February 1998. 9 December 2001 http://www.sil.org/klp/eticemic.htm.

Martin The Warrior :: essays research papers

Martin In a time of danger A time of hunger The mouse was a stranger The mouse was strong He showed the cats With help from some bats How to behave He showed his pain, anger, and strife The creatures were thankful As a matter of fact He was honored for not only a life But for many years to come The novel, Martin the Warrior by Brian Jacques, is a book about a young mouse warrior named Martin, son of Luke the Warrior, a mouse that fought sea rats, One day, after the murder of most of his tribe (including his wife), Luke set sail to have his revenge against Vilu Daskar, the stoat pirate responsible for the massacre. Before he left, he gave Martin his sword, which had been handed down through their family since Luke's own grandsire lived.   Ã‚  Ã‚  Ã‚  Ã‚  This book is about how Martin travels through a land full of moles, squirrels, and other woodland creatures which talk and walk upright. Martin goes around meeting creatures from all different lands and asks them to join his army to fight a tyrant who is keeping slaves in his fort, Marshank. The plot of this book is how Martin and his friends fight the tyrant, Badrang, to free slaves. The main idea of the book is how and why Martin and his army fight the tyrant.   Ã‚  Ã‚  Ã‚  Ã‚  When Martin was captured as a slave for Badrang the Tyrant, he was furious. Not only did the evil rat steal his father's sword, he beat and mistreated all of the slaves horribly! Devising a plan, Martin frees himself and two of his friends from the Marshank, the slave camp: Brome the mouse and Felldoh the squirrel. Brome's sister, Laterose (Rose for short) and her companion Grumm the mole all set out with Martin and his friends to go get help from their hometown of Noonvale. Unfortunately, due to the sea's conditions, Martin, Rose, and Grumm get separated from Brome and Felldoh. The two strings of the story carry on and tie together at the end: Martin's group eventually reaches Noonvale, where he returns to Badrang to get his revenge, and Brome and Felldoh join the Rambling Rosehip Players, a bunch of happy-go-lucky animals that made the hardships less hard, and also get to the slave camp. The ending is tragic, and whenever I read it I get depressed. Martin, in th e end, retrieves his sword from Badrang, and succeeds in killing him, but Rose, who he has become very much attached to, tries to help Martin in killing Badrang, but only ends up getting killed by him herself.

letter from john foulcher to editor Essay -- essays research papers

Dear Editor My name is John Foulcher, renowned Australian poet. I have recently been surfing the World Wide Web and by accident I come up with your site, â€Å"Online Anthology of Australian Poets†. The subject matter of poetry attracted me to wonder around your website. I believe my poetry should be included in your collection for I have lived and breathed Australian culture for just over 50 years now, I have recorded my way of life in my poems, and in particular I have a specific poem to refer to you, that is of my own and two others (also of my own work) that I think are you should seriously consider having in your collection. The first poem I think you should consider in adding to your list of poems is â€Å"For the Fire†, this poem was about the time I went in to the forest to get some lumber, and during my time there I noticed some of natures creations around me, like the kookaburra and wind that swerved in and out of the trees etc. The purpose of the poem was to express my interests of nature and how I felt and what I experienced when I was in the woods at that time. There’s also that life and death aspect in this poem, in which the bird has the lizard in his mouth and also by the word â€Å"fire†. The use of alliteration, tone, mood, theme and other elements that construct a well balanced poem are in this piece of literature. In the first stanza the sentence, â€Å"it’s a singular, human thud†, this line creates a picture in the mind that there’s feel of isolation and lonesomene...

Currency Risk Management Essay

Currency or Exchange rate risk management is an integral part in every firm’s decisions about foreign currency exposure. Currency risk hedging strategies entail eliminating or reducing this risk, and require understanding of both the ways that the exchange rate risk could affect the operations of economic agents and techniques to deal with the consequent risk implications. Selecting the appropriate hedging strategy is often a daunting task due to the complexities involved in measuring accurately current risk exposure and deciding on the appropriate degree of risk exposure that ought to be covered. The need for currency risk management started to arise after the break down of the Bretton Woods system and the end of the U.S. dollar peg to gold in 1973. The issue of currency risk management for non-financial firms is independent from their core Business and is usually dealt by their corporate treasuries. Most multinational firms have also risk committees to oversee the treasury’s strategy in managing the exchange rate (and interest Rate) risk. This shows the importance that firms put on risk management issues and techniques. Conversely, international investors usually, but not always, manage their exchange rate risk independently from the underlying assets and/or liabilities. Since their currency exposure is related to translation risks on assets and liabilities denominated in foreign currencies, they tend to consider currencies as a separate asset class requiring a Currency overlay mandate. It can be argued that prudent management of multinational firms requires currency risk hedging for their foreign transaction, translation and economic operations to avoid potentially adverse currency effects on their profitability and market valuation. DEFINITION AND TYPES OF CURRENCY RISK A common definition of currency risk relates to the effect of unexpected exchange rate changes on the value of the firm. In particular, it is defined as the possible direct loss (as a result of an unhedged exposure) or indirect loss in the firm’s cash flows, assets and liabilities, net profit and, in turn, its stock market value from an exchange rate move. To manage the exchange rate risk inherent in multinational firms’ operations, a firm needs to determine the specific type of current risk exposure, the hedging strategy and the available instruments to deal with these currency risks. Multinational firms are participants in currency markets by virtue of their international operations. To measure the impact of exchange rate movements on a firm that is engaged in foreign-currency denominated transactions, i.e., the implied value-at-risk (VAR) from exchange rate moves, we need to identify the type of risks that the firm is exposed to and the amount of risk encountered. The four main types of currency / exchange rate risk that exist: 1. Translation risk: A firm’s translation exposure is the extent to which its financial reporting is affected by exchange rate movements. As all firms generally must prepare consolidated financial statements for reporting purposes, the consolidation process for multinationals entails translating foreign assets and liabilities or the financial statements of foreign subsidiaries from foreign to domestic currency. While translation exposure may not affect a firm’s cash flows, it could have a significant impact on a firm’s reported earnings and therefore its stock price. Translation exposure is distinguished from transaction risk as a result of income and losses from various types of risk having different accounting treatments. Translation gives special consideration to assets and liabilities with regards to foreign exchange risk, whereas exposures to revenues and expenses can often be managed ex ante by managing transactional exposures when cash flows take place; 2. Transaction risk: A firm has transaction exposure whenever it has contractual cash flows (receivables and payables) whose values are subject to unanticipated changes in exchange rates due to a contract being denominated in a foreign currency. To realize the domestic value of its foreign-denominated cash flows, the firm must exchange foreign currency for domestic currency. As firms negotiate contracts with set prices and delivery dates in the face of a volatile foreign exchange market with exchange rates constantly fluctuating, the firms face a risk of changes in the exchange rate between the foreign and domestic currency. Firms generally become exposed as a direct result of activities such as importing and exporting or borrowing and investing. Exchange rates may move by up to 10% within any single year, which can significantly affect a firm’s cash flows, meaning a 10% decline in the value of a receivable or a 10% rise in the value of a payable. Such outcomes could be troubl esome as export profits could be negated entirely or import costs could rise substantially; 3. Economic Risk: A firm has economic exposure (also known as operating exposure) to the degree that its market value is influenced by unexpected exchange rate fluctuations. Such exchange rate adjustments can severely affect the firm’s position with regards to its competitors, the firm’s future cash flows, and ultimately the firm’s value. Economic exposure can affect the present value of future cash flows. Any transaction that exposes the firm to foreign exchange risk also exposes the firm economically, but economic exposure can be caused by other business activities and investments which may not be mere international transactions, such as future cash flows from fixed assets. A shift in exchange rates that influences the demand for a good in some country would also be an economic exposure for a firm that sells that good; and 4. Contingent Risk: A firm has contingent exposure when bidding for foreign projects or negotiating other contracts or foreign direct investments. Such an exposure arises from the potential for a firm to suddenly face a transactional or economic foreign exchange risk, contingent on the outcome of some contract or negotiation. For example, a firm could be waiting for a project bid to be accepted by a foreign business or government that if accepted would result in an immediate receivable. While waiting, the firm faces a contingent exposure from the uncertainty as to whether or not that receivable will happen. If the bid is accepted and a receivable is paid the firm then faces a transaction exposure, so a firm may prefer to manage contingent exposures. MEASUREMENT OF EXCHANGE RATE RISK After defining the types of exchange rate risk that a firm is exposed to, a crucial aspect in a firm’s exchange rate risk management decisions is the measurement of these risks.   Measuring currency risk may prove difficult, at least with regards to translation and economic risk. At present, a widely used method is the value-at-risk (VAR) model. Broadly, value at risk is defined as the maximum loss for a given exposure over a given time horizon with z% confidence. The VAR methodology can be used to measure a variety of types of risk, helping firms in their risk management. However, the VAR does not define what happens to the exposure for the (100 – z) % point of confidence, i.e., the worst case scenario. Since the VAR model does not define the maximum loss with 100 percent confidence, firms often set operational limits, such as nominal amounts or stop loss orders, in addition to VAR limits, to reach the highest possible coverage. VALUE-AT-RISK CALCULATION The VAR measure of exchange rate risk is used by firms to estimate the riskiness of a foreign exchange position resulting from a firm’s activities, including the foreign exchange position of its treasury, over a certain time period under normal conditions. The VAR calculation depends on 3 parameters: †¢ The holding period, i.e., the length of time over which the foreign exchange position is planned to be held. The typical holding period is 1 day. †¢ The confidence level at which the estimate is planned to be made. The usual confidence levels are 99 percent and 95 percent. †¢ The unit of currency to be used for the denomination of the VAR. Assuming a holding period of x days and a confidence level of y%, the VAR measures what will be the maximum loss (i.e., the decrease in the market value of a foreign exchange position) over x days, if the x-days period is not one of the (100-y)% x-days periods that are the worst under normal conditions. Thus, if the foreign exchange position has a 1-day VAR of $10 million at the 99 percent confidence level, the firm should expect that, with a probability of 99 percent, the value of this position will decrease by no more than $10 million during 1 day, provided that usual conditions will prevail over that 1 day. In other words, the firm should expect that the value of its foreign exchange rate position will decrease by no more than $10 million on 99 out of 100 usual trading days or by more than $10 million on 1 out of every 100 usual trading days. To calculate the VAR, there exists a variety of models. Among them, the more widely-used are: (1) the historical simulation, which assumes that currency returns on a firm’s foreign exchange position will have the same distribution as they had in the past; (2) the variance- covariance model, which assumes that currency returns on a firm’s total foreign exchange position are always (jointly) normally distributed and that the change in the value of the foreign exchange position is linearly dependent on all currency returns; and (3) Monte Carlo simulation which assumes that future currency returns will be randomly distributed. The historical simulation is the simplest method of calculation. This involves running the firm’s current foreign exchange position across a set of historical exchange rate changes to yield a distribution of losses in the value of the foreign exchange position, say 1,000, and then computing a percentile (the VAR). Thus, assuming a 99 percent confidence level and a 1-day holding period, the VAR could be computed by sorting in ascending order the 1,000 daily losses and taking the 11th largest loss out of the 1,000 (since the confidence level implies that 1 percent of losses – 10 losses –should exceed the VAR). The main benefit of this method is that it does not assume a normal distribution of currency returns, as it is well documented that these returns are not normal but rather leptokurtic. Its shortcomings, however, are that this calculation requires a large database and is computationally intensive. The variance – covariance model assumes that: (1) the change in the value of a firm’s total foreign exchange position is a linear combination of all the changes in the values of individual foreign exchange positions, so that also the total currency return is linearly dependent on all individual currency returns; and (2) the currency returns are jointly normally distributed. Thus, for a 99 percent confidence level, the VAR can be calculated as: VAR= -Vp (Mp + 2.33 Sp) Where, Vp is the initial value (in currency units) of the foreign exchange position Mp is the mean of the currency return on the firm’s total foreign exchange position, which is a weighted average of individual foreign exchange positions Sp is the standard deviation of the currency return on the firm’s total foreign exchange position, which is the standard deviation of the weighted transformation of the variance-covariance matrix of individual foreign exchange positions While the variance-covariance model allows for a quick calculation, its drawback includes the restrictive assumptions of a normal distribution of currency returns and a linear combination of the total foreign exchange position. Note, however, that the normality assumption could be relaxed. When a non-normal distribution is used instead, the computational cost would be higher due to the additional estimation of the confidence interval for the loss exceeding the VAR. Monte Carlo simulation usually involves principal components analysis of the variance-covariance model, followed by random simulation of the components. While it’s main advantages include its ability to handle any underlying distribution and to more accurately assess the VAR when non-linear currency factors are present in the foreign exchange position (e.g., options), its serious drawback is the computationally intensive process. MANAGEMENT OF CURRENCY RISK After identifying the types of exchange rate risk and measuring the associated risk exposure, a firm needs to decide whether to hedge or not these risks. In international finance, the issue of the appropriate strategy to manage (hedge) the different types of exchange rate risk has yet to be settled. In practice, however, corporate treasurers have used various currency risk management strategies depending, ceteris paribus, on the prevalence of a certain type of risk and the size of the firm. A. Hedging Strategies Indicatively, transaction risk is often hedged tactically (selectively) or strategically to preserve cash flows and earnings, depending on the firm’s treasury view on the future movements of the currencies involved. Tactical hedging is used by most firms to hedge their transaction currency risk relating to short-term receivable and payable transactions, while strategic hedging is used for longer-period transactions. However, some firms decide to use passive hedging, which involves the maintenance of the same hedging structure and execution over regular hedging periods, irrespective of currency expectations—that is, it does not require that a firm takes a currency view. Translation, or balance sheet, risk is hedged very infrequently and non-systematically, often to avoid the impact of possible abrupt currency shocks on net assets. This risk involves mainly long-term foreign exposures, such as the firm’s valuation of subsidiaries, its debt structure and international investments. However, the long-term nature of these items and the fact that currency translation affects the balance sheet rather than the income statement of a firm, make hedging of the translation risk less of a priority for management. For the translation of currency risk of a subsidiary’s value, it is standard practice to hedge the net balance sheet exposures, i.e., the net assets (gross assets less liabilities) of the subsidiary that might be affected by an adverse exchange rate move. Within the framework of hedging the exchange rate risk in a consolidated balance sheet, the issue of hedging a firm’s debt profile is also of paramount importance. The currency and maturity composition of a firm’s debt determines the susceptibility of its net equity and earnings to exchange rate changes. To reduce the impact of exchange rates on the volatility of earnings, the firm may use an optimization model to devise an optimal set of hedging strategies to manage its currency risk. Hedging the remaining currency exposure after the optimization of the debt composition is a difficult task. A firm may use tactical hedging, in addition to optimization, to reduce the residual currency risk. Moreover, if exchange rates do not move in the anticipated direction, translation risk hedging may cause either cash flow or earnings volatility. Therefore, hedging translation risk often involves careful weighing the costs of hedging against the potential cost of not hedging. Economic risk is often hedged as a residual risk. Economic risk is difficult to quantify, as it reflects the potential impact of exchange rate moves on the present value of future cash flows. This may require measuring the potential impact of an exchange rate deviation from the benchmark rate used to forecast a firm’s revenue and cost streams over a given period. In this case, the impact on each flow may be netted out over product lines and across markets, with the net economic risk becoming small for firms that invest in many foreign markets because of offsetting effects. Also, if exchange rate changes follow inflation differentials (through PPP) and a firm has a subsidiary that faces cost inflation above the general inflation rate, the firm could find its competitiveness eroding and its original value deteriorating as a result of exchange rate adjustments that are not in line with PPP. Under these circumstances, the firm could best hedge its economic exposure by creating payables (e.g., financing operations) in the currency that the firm’s subsidiary experiences the higher cost inflation (i.e., in the currency that the firm’s value is vulnerable). Sophisticated corporate treasuries, however, are developing efficient frontiers of hedging strategies as a more integrated approach to hedge currency risk than buying a plain vanilla hedge to cover certain foreign exchange exposure. In effect, an efficient frontier measures the cost of the hedge against the degree of risk hedged. Thus, an efficient frontier determines the most efficient hedging strategy as that which is the cheapest for the most risk hedged. Given a currency view and exposure, hedging optimization models usually compare 100 percent unhedged strategies with 100 percent hedged using vanilla forwards and option strategies in order to find the optimal one. Although this approach to managing risk provides the least-cost hedging structure for a given risk profile, it critically depends on the corporate treasurer’s view of the exchange rate. Note that such optimization can be used for transaction, translation or economic currency risk, provided that the firm has a specific currency view (i.e., a possible exchange rate forecast over a specified time period). B. Hedging Benchmarks and Performance Hedging performance can be measured as a distance to a given benchmark rate. The risk embedded in the hedge is usually expressed as a VAR number that will be consistent with the performance measure. Hedging optimization models, as methods for optimizing hedging strategies for currency-denominated cash flows, help find the most efficient hedge for individual currency exposures, while most of them do not provide a hedging process for multiple currency hedging. Thus, both performance and VAR are measured as effective hedge rates, calculated for each hedging instrument used and the risk in terms of a confidence level. A single optimal hedging strategy is then selected by defining the risk that a firm is willing to take. This strategy is the lowest possible effective hedge rate for an acceptable level of uncertainty. In this way, when the firm’s currency view entails a perception of volatility, options generate a better or similar effective hedge rate at lower uncertainty than the unhedged position. Furthermore, when local currency has a relatively high yield and low volatility, options will almost always generate a better effective hedging rate than forward hedging. As part of the currency risk management policy, firms use a variety of hedging benchmarks to manage their hedging strategies effectively. Such benchmarks could be the hedging level (i.e., a certain percent), the reporting period especially for firms that use forward hedging to limit the volatility of their net equity (e.g., quarterly or 12-month benchmarks) and budget exchange rates, depending on the prevailing accounting rules. Moreover, benchmarks enable the performance of individual hedges to be measured against that of the firm. C. Hedging and Budget Rates Budget exchange rates provide firms with a reference exchange rate level. Setting budget exchange rates is often linked to the firm’s sensitivities and benchmarking priorities. After deciding on the budget rate, the corporate treasury will have to secure an appropriate hedge rate and ensure that there is minimal deviation from that hedge rate. This process will determine the frequency and instruments to be used in hedging. It should be further pointed out that persistent moves relative to the numeracies (functional) currency should be reflected in the budget rates, or strategic positioning and hedging should be considered. Firms have different practices in setting budget exchange rates. Many corporate treasurers of multinational firms prefer to use PPP rates as budget exchange rates, often with the understanding that tactical hedging may be needed over the short-term where the forecasting performance of the PPP model is usually poor.2 However, other multinational firms prefer to set the budget rate in accordance with their sales calendar and, in turn, with their hedging strategy. For example, if a firm has a quarterly sales calendar, it may decide to hedge its next year’s quarterly foreign currency cash flow in such a way that they do not differ by more than a certain percentage from the cash flow in the same quarter of last year. Accordingly, this will necessitate four hedges per year, each of one-year tenor, with hedging being done at the end of the period, using the end-of-period exchange rate as its budget rate. Alternatively, a firm may decide to set its budget exchange rate at the daily average exchange rate over the previous fiscal year. In such case, the firm would need to use one hedge through, perhaps, an average-based instrument like an option or a synthetic forward. This hedging operation will usually be executed on the last day of the previous fiscal year, with starting day the first day of the new fiscal year. Furthermore, a firm may also use passive currency hedging, such as hedging the average value of a foreign currency cash flow over a specified time period, relative to a previous period, through option structures available in the market. This type of hedging strategy is fairly simple and easier to monitor. The relative version of the PPP theory states that bilateral exchange rates would adju st to the relative price differentials of the same good traded in the two countries. Setting budget exchange rates is also crucial for a firm’s pricing strategy, in addition to their importance for defining the benchmark hedging performance and tenor of a hedge (as the latter generally match cash flow hedging requirements). However, the budget exchange rate used to forecast cash flows needs to be close to the spot exchange rate in order to avoid possible major changes in the firm’s pricing strategy or to reconsider its hedging strategy. In this connection, it should be noted that forecasting future exchange rates is a key aspect of a firm’s pricing strategy. Since it has been well-documented that forward rates are poor predictors of future spot rates, structural or time-series exchange rate models need to be employed for such an endeavour. This becomes evident if we compare a firm’s net cash flows estimated by using the forecast rate and the future spot exchange rate. For an investment in a foreign subsidiary, moreover, the budget exchange rate is often the accounting rate, i.e., the exchange rate at the end of the previous fiscal year. D. Best Practices for Exchange Rate Risk Management For their currency risk management decisions, firms with significant exchange rate exposure often need to establish an operational framework of best practices. These practices or principles may include: 1. Identification of the types of exchange rate risk that a firm is exposed to and measurement of the associated risk exposure. As mentioned before, this involves determination of the transaction, translation and economic risks, along with specific reference to the currencies that are related to each type of currency risk. In addition, measuring these currency risks—using various models (e.g. VAR)—is another critical element in identifying hedging positions. 2. Development of an exchange rate risk management strategy. After identifying the types of currency risk and measuring the firm’s risk exposure, a currency strategy needs to be established on how to deal with these risks. In particular, this strategy should specify the firm’s currency hedging objectives—whether and why the firm should fully or partially hedge its currency exposures. Furthermore, a detailed currency hedging approach should be established. It is imperative that a firm details the overall currency risk management strategy on the operational level, including the execution process of currency hedging, the hedging instruments to be used, and the monitoring procedures of currency hedges. 3. Creation of a centralized entity in the firm’s treasury to deal with the practical aspects of the execution of exchange rate hedging. This entity will be responsible for exchange rate forecasting, the hedging approach mechanisms, the accounting procedures regarding currency risk, costs of currency hedging, and the establishment of benchmarks for measuring the performance of currency hedging. (These operations may be undertaken by a specialized team headed by the treasurer or, for large multinational firms, by a chief dealer.) 4. Development of a set of controls to monitor a firm’s exchange rate risk and ensure appropriate position taking. This includes setting position limits for each hedging instrument, position monitoring through mark-to-market valuations of all currency positions on a daily basis (or intraday), and the establishment of currency hedging benchmarks for periodic monitoring of hedging performance (usually monthly). 5. Establishment of a risk oversight committee. This committee would in particular approve limits on position taking, examine the appropriateness of hedging instruments and associated VAR positions, and review the risk management policy on a regular basis. Managing exchange rate risk exposure has gained prominence in the last decade, as a result of the unusual occurrence of a large number of currency crises. From the corporate managers’ perspective, currency risk management is increasingly viewed as a prudent approach to reducing a firm’s vulnerabilities from major exchange rate movements. This attitude has also been reinforced by recent international attention on both accounting and balance sheet risks. HEDGING INSTRUMENTS FOR MANAGING EXCHANGE RATE RISK Within the framework of a currency risk management strategy, the hedging instruments allowed to manage currency risk should be specified. The available hedging instruments are enormous, both in variety and complexity, and have followed the dramatic increase in the specific hedging needs of the modern firm. These instruments include both OTC and exchange-traded products. Among the most common OTC currency hedging instruments are currency forwards and cross-currency swaps. Currency forwards are defined as buying a currency contract for future delivery at a price set today. Two types of forwards contracts are often used: outright forwards (involving the physical delivery of currencies) and non-deliverable forwards (which are settled on a net cash basis). With forwards, the firm is fully hedged. However, the high cost of forward contracts and the risk of the exchange rate moving in the opposite direction are serious disadvantages. The two most commonly used cross-currency swaps are the cross-currency coupon swap and the cross-currency basis swaps. The cross-currency coupon swap is defined as buying a currency swap and at the same time pay fixed and receives floating interest payments. Its advantage is that it allows firms to manage their foreign exchange rate and interest rate risks, as they wish, but it leaves the firm that buys this instrument vulnerable to both currency and interest rate risk. Cross-currency basis swap is defined as buying a currency swap and at the same time pay floating interest in a currency and receive floating in another currency. This instrument, while assuming the same currency risk as the standard currency swap, has the advantage that it allows a firm to capture prevailing interest rate differentials. However, the major disadvantage is that the primary risk for the firm is interest rate risk rather that currency risk. For exchange-traded currency hedging instruments, the main types are currency options and currency futures. The development of various structures of currency options has been very rapid, and is attributed to their flexible nature. The most common type of option structure is the plain vanilla call, which is defined as buying an upside strike in an exchange rate with no obligation to exercise. Its advantages include its simplicity, lower cost than the forward, and the predicted maximum loss—which is the premium. However, its cost is higher than other sophisticated options structures such as call spreads (buy an at-the-money call and sell a low delta call). Currency futures are exchange-traded contracts specifying a standard volume of a particular currency to be exchanged on a specific settlement date. They are similar to forward contracts in that they allow a firm to fix the price to be paid for a given currency at a future point in time. Yet, their characteristics differ from forward rates, both in terms of the available traded currencies and the typical (quarterly) settlement dates. However, the price of currency futures will normally be similar to the forward rates for a given currency and settlement date. Comparing currency forward and currency futures markets, the size of the contract and the delivery date are tailored to individual needs in the forward market (i.e., determined between a firm and a bank), as opposed to currency futures contracts that are standardized and guaranteed by some organized exchange. While there is no separate clearing-house function for forward markets, all clearing operations for futures markets are handled by an exchange clearing house, with daily mark-to-market settlements. In terms of liquidation, while most forward contracts are settled by actual delivery and only some by offset—at a cost, in contrast, most futures contracts are settled by offset and only very few by delivery. Furthermore, the price of a futures contract changes over time to reflect the market’s anticipation of the future spot rate. If a firm holding a currency futures contract decides before the settlement date that it no longer wants to maintain such a position, it can close out its position by selling an identical futures contract. This, however, cannot be done with forward contracts. Finally, since currency hedging is often costly, a firm may first consider â€Å"natural† hedging, such as (1) matching, which involves pairing suitably a multinational firm’s foreign currency inflows and outflows with respect to amount and timing; (2) netting, which involves the consolidated settlement of receivables, payables and debt among the subsidiaries of a firm; and (3) invoicing in a foreign currency, which reduces transaction risk related primarily to exports and imports. HEDGING PRACTICES BY U.S. FIRMS According to the BIS (see Tables 1-4) and the International Swap and Derivatives Association, the OTC derivatives market has experienced an exponential growth. Even with the recent slowdown due to the special disclosure requirements of FAS 133, derivatives continue to be the main hedging instrument for most firms. However, the increased availability of derivative instruments, coupled with the advent of mark-to-market hedge accounting (FAS 133 and IAS 39), implies a difficult to follow impact of derivatives on firms’ financial statements. Several surveys have shown certain characteristics and practices of U.S. non-financial firms using derivatives. Thus, the larger the size of sales of U.S. non-financial firms, the more likely is to use derivatives in their risk management. Foreign currency derivatives usage is most common, with almost three-fourths of the reporting firms taking positions. The primary goal of exchange risk hedging is the minimization of the variability in cash flow and in accounting earnings, arising from the firms’ operational activities and characteristics. Preoccupation with accounting earnings may be related to their role in analysts’ perceptions and predictions of future earnings and in management compensation. Furthermore, it is interesting to note that U.S. firms do not place high importance in minimizing the variation in the market value of the firm (the present discounted value of the stream of future cash flows) when they use derivatives in risk management. The choice of derivative instruments for foreign exchange management by U.S. firms is concentrated in simple instruments, with OTC currency forwards being by far the most popular instrument (over 50 percent of all foreign exchange derivatives instruments), OTC currency options being the second most preferred hedging instrument (around 20 percent of all foreign exchange derivative instruments) and OTC swaps being the third (around 10percent). Forward-type (volatility elimination) instruments are used to hedge foreign exchange exposures arising from U.S. firms’ contractual commitments (accounts receivable/payable, and repatriations), as recommended by the international financial literature. Option-type instruments, on the other hand, are used to hedge uncertain foreign currency-denominated future cash flows (usually, related to anticipated transactions beyond one year and to cover economic exposures). The tendency of US firms to use OTC currency forwards rather than OTC options or swaps should mainly be attributed to the relatively higher liquidity and depth of forward markets. The use of OTC instruments (forwards/swaps and options) dominates that of exchange traded hedging instruments, with currency futures being preferred by less than 10 percent of U.S. firms and currency options being preferred by a very small percentage of firms. The prevalence of OTC instruments should be attributed to firms’ very specific hedging needs that can primarily be accommodated in the more-flexible OTC market. The majority of U.S. firms with a set frequency for revaluing derivatives do so on a monthly basis, with a quarter of the total firms valuing their derivatives at least weekly and a very small percentage doing so only on an annual basis. Finally, the most common methods to evaluate the riskiness of their foreign exchange positions are stress testing of derivatives and VAR techniques. CONCLUSION Measuring and managing currency risk exposure are important functions in reducing a firm’s vulnerabilities from major exchange rate movements. These vulnerabilities mainly arise from a firm’s involvement in international operations and investments, where exchange rate changes could affect profit margins, through their effect on sources for inputs, markets for outputs and debt, and the value of assets. Prudent management of currency risk has been increasingly mandated by corporate boards, especially after the currency-crisis episodes of the last decade and the consequent heightened international attention on accounting and balance sheet risks. In managing currency risk, multinational firms utilize different hedging strategies depending on the specific type of currency risk. These strategies have become increasingly complicated as they try to address simultaneously transaction, translation and economic risks. As these risks could be detrimental to the profitability and the market valuation of a firm, corporate treasurers, even of smaller-size firms have become increasingly proactive in controlling these risks. Thereby, a greater demand for hedging protection against these risks has emerged and, in response, a greater variety of instruments has been generated by the ingenuity of the financial engineering industry. This paper presents some of the main issues in the measurement and management of exchange rate risks faced by firms, with special attention to the traditional types of exchange rate risk (transaction, translation, and economic), the currently predominant methodology in measuring exchange rate risk (VAR), and the advantages and disadvantages of various exchange rate risk management approaches (tactical vs. strategical, and passive vs. active). It also outlines a set of widely-accepted best practices in currency risk management, and reviews the use of some of the widely-used hedging instruments in the OTC and exchange traded markets. It also reports on the use of various derivatives instruments and hedging practices of U.S. multinationals. Based on the reported U.S. data, it is interesting to note that the larger the size of a firm the more likely it is to use derivative instruments in hedging its exchange rate risk exposure; the primary goal of U.S. firms’ exchange rate risk hedging operations is to minimize the variability in their cash flow and earning accounts (mainly related to payables, receivables and repatriations); and the choice of foreign exchange derivatives instruments is concentrated in OTC currency forwards (over 50 percent of all foreign exchange derivatives used), OTC currency options (around 20 percent) and OTC currency swaps (around 10 percent). From the available exchange-traded foreign exchange hedging instruments, currency futures is preferred by less than 10 percent of U.S. firms and currency options by around 2 percent. Overall, it should be noted that the data on U.S. firms are only representative of the reporting period that they refer to and are indicative of the level of sophistication of U.S. corporate treasurers and the level of development of local derivatives markets. By no means can these stylized facts be generalized for other time periods and countries, especially those with different corporate structures and capital market development. To form a better understanding of global firms’ practices in this area, more empirical studies would need to be undertaken to explore their exchange rate risk measurement and hedging behaviours.