Tuesday, December 3, 2019
Marketing Boards Introduction Marketing Boards are government involved ways of regulating farmer's production and price, while protecting the overall profit of every farmer in that particular production. Since there is nothing farmers can do about the inelastic nature of the demand for farm products, the key to supporting and stabilizing farm prices and incomes lies in controlling the supply of farm products. In other words, farmers would benefit greatly from an oligopolistic (banning firms together) price and supply agreement among themselves. Farming is a highly competitive industry ? it consists of many small, independent producers selling substantially similar products in a big marketplace. Given these realities, it has proven very difficult to achieve any kind of agreement or coordinated action on the part of farmers, even when it would be in their best interest to do so. Attempts have been made to use farm cooperatives to restrict production and thus support and stabilize prices; however, these efforts rarely work. Such agreements are voluntary and lack means of enforcement; as a result, too many farmers don't participate or break the agreements. This is when farmers turned to government assistance to help with their low and unstable incomes and marketing boards was proposed. In the following we will discuss what marketing boards are, how they work, how they effect the Canadian economy, and how widespread they are. We will focus on particular Canadian producers who use marketing boards and how they are both positive and negative in contributing to the economy. We will also look at how marketing boards are effecting the consumers. In total outlook, the purpose of this review is to provide a clear and explicit focus for the research to be undertaken as well as to establish the scope of the study.
Wednesday, November 27, 2019
Ã¢â¬Å"The MomentÃ¢â¬ by Margaret Atwood and Ã¢â¬Å"LondonÃ¢â¬ by William Blake Essay Both Ã¢â¬Å"The MomentÃ¢â¬ by Margaret Atwood and Ã¢â¬Å"LondonÃ¢â¬ by William Blake are poems about manÃ¢â¬â¢s relationship and dependency on nature. They both teach the message that you need to embrace nature to survive as a human; and warn against the consequences of not doing so. Where AtwoodÃ¢â¬â¢s poem is more of a warning about what could happen if we reject nature, Blake letÃ¢â¬â¢s us experience what this is actually like, he describes humans trying what Atwood has warned against.The tone of the poems is very different. BlakeÃ¢â¬â¢s tone could be described as morbid, oppressive and disillusioned with words like Ã¢â¬Å"woeÃ¢â¬ and Ã¢â¬Å"blackening,Ã¢â¬ where the tone of AtwoodÃ¢â¬â¢s poem is clearer and more didactic, more suited to delivering the political message it aims to, and less personal than BlakeÃ¢â¬â¢s narrative poem. There are elements of a misanthropic nature in both poems. AtwoodÃ¢â¬â¢s poem seems to be quite mocking of the human race, s howing how oblivious we are to what we are bringing upon ourselves, with the line Ã¢â¬Å"house, half-acre, square mile, island, countryÃ¢â¬ sounding somewhat like a politicians speech. Blake is very bitter and condemns man in his outcry against the industrialisation of London.Both poets use equal stanzas and rather simplistic language in their poems. For Atwood, this is to deliver her message to as many people as she can. BlakeÃ¢â¬â¢s poem takes on a song-like quality and he creates this nursery-rhyme feel to show how purity can be corrupted through experience, in the way he uses tabula rasa in his Ã¢â¬Å"new-born infantÃ¢â¬ who is already a hindrance to his Ã¢â¬Å"harlotÃ¢â¬ mother.The poems slightly contradict each other in their idea of what being in sync with nature is and what it is exactly which makes you fall out of sync with nature. Atwood says that the struggle and Ã¢â¬Å"hard workÃ¢â¬ to have more, achieve more and be more is human nature, and makes us one wi th nature and living alongside it. However, the moment we Ã¢â¬Å"at lastÃ¢â¬ stop struggling and sit back to admire our wealth, saying Ã¢â¬Å"I own thisÃ¢â¬ is the moment nature rejects us. On the other hand, Blake shows this struggle in the industrialisation of the city and this does not seem in sync with nature at all. Both poets agree on the fact that in trying to control nature, nature can destroy us; we cannot live without it. They show this through a change of pace and rhythm. In Ã¢â¬Å"The MomentÃ¢â¬ the building pace of stanza one is broken by Ã¢â¬Å"I own this.Ã¢â¬ This breaks the natural pace of the poem, showing how humans have upset the natural flow of life.Blake also uses this idea in his change of rhythm from the first to second stanza, showing how, due to human actions, the natural rhythm of life has changed, in the same way the natural rhythm of the poem does; what we are doing is not natural. Atwood uses rhythm in her second stanza to warn against challe nging nature. She tells how the Ã¢â¬Å"trees will unloose their soft arms from around youÃ¢â¬ and the Ã¢â¬Å"air will move back from you.Ã¢â¬ This whole stanza has a feel of things moving backwards like a tape in rewind. Time moves forwards, unlike in this stanza. Here, Atwood is using BlakeÃ¢â¬â¢s idea of how this behaviour is unnatural. Atwood is also telling us how we canÃ¢â¬â¢t survive without nature; we need Ã¢â¬Å"airÃ¢â¬ to breathe. The last line Ã¢â¬Å"and you canÃ¢â¬â¢t breathe,Ã¢â¬ breaks the flow of the poem, making you take a breath. This almost replicated the action of gasping for air. Blake also warns against trying to break away from nature, he describes a city full of misery and Ã¢â¬Å"woe.Ã¢â¬ Although Atwood focuses more on how nature will reject us and the consequences of nature, where Blake talks more about human suffering and human consequences, with more manmade references, poet poets use the idea of trying to control nature. Blake uses oxym oronÃ¢â¬â¢s to show this. The ideas of Ã¢â¬Å"wanderingÃ¢â¬ through a Ã¢â¬Å"charteredÃ¢â¬ street and a Ã¢â¬Å"charteredÃ¢â¬ river which is Ã¢â¬Å"flowingÃ¢â¬ seem to contradict themselves. Ã¢â¬Å"CharteredÃ¢â¬ implies carefully measured and controlled, but in reality, man cannot ever charter a free and Ã¢â¬Å"flowing river,Ã¢â¬ a part of nature. Where Atwood writes in blank verse and in a much more free nature, with a constantly changing pace, to show the lack of control we have over nature, BlakeÃ¢â¬â¢s structure is much more restrictive. He uses an alternate line rhyme and a strong iambic pentameter comes through in Ã¢â¬Å"in every cry of every man, in every infantÃ¢â¬â¢s cry of fear.Ã¢â¬ This strong metre creates a relentless pace, and conveys an idea of confinement and being trapped, due to the set form, mirroring the Ã¢â¬Å"charteredÃ¢â¬ lives of the cities inhabitants after they have tried to control the nature surrounding them.Although nature co mes across a lot stronger in AtwoodÃ¢â¬â¢s poem, in the way she gives nature its own voice saying Ã¢â¬Å"we never belonged to you,Ã¢â¬ both poets use the idea of mass to create strength. In Ã¢â¬Å"The Moment,Ã¢â¬ Atwood uses the exclusive pronoun Ã¢â¬Å"they whisper,Ã¢â¬ putting nature in the plural. Blake also uses this idea in the use of Ã¢â¬Å"everyÃ¢â¬ voice, to show the wide-spread, and strength of the misery in the city due to man.Both Atwood and Blake make use of repetition. Atwood does this in the repetition of Ã¢â¬Å"the moment,Ã¢â¬ first to show the human perception of the situation, and secondly to show the reality of it, highlighting the stupidity of man. Blake does this in his repetition of Ã¢â¬Å"every cry.Ã¢â¬ This use of anaphora is a declamation to be heard, reminding readers of what they would rather not admit to and emphasising the idea of no escape. Both poets also effectively use onomatopoetic techniques. In Ã¢â¬Å"London,Ã¢â¬ BlakeÃ¢â¬â ¢s use of the plosive /b/ in Ã¢â¬Å"banÃ¢â¬ Ã¢â¬Å"blastsÃ¢â¬ Ã¢â¬Å"blackeningÃ¢â¬ Ã¢â¬Å"bloodÃ¢â¬ Ã¢â¬Å"new-bornÃ¢â¬ and Ã¢â¬Å"blightsÃ¢â¬ explodes from the lips to join the crying and cursing on the London streets, making the poem quite sensory and allowing the reader to actually experience Ã¢â¬Å"London.Ã¢â¬ In the second stanza of Ã¢â¬Å"The Moment,Ã¢â¬ the sounds start from a soft /s/ and gradually build up through a harsher /b/ to a sinister Ã¢â¬ËhissingÃ¢â¬â¢ sound in the alliteration Ã¢â¬Å"cliffs fissure and collapse.Ã¢â¬ This reflects the worsening of the damage nature will cause and how humans will carry on until it is too late. Blake also uses an alliteration in Ã¢â¬Å"mind-forged manacles,Ã¢â¬ reinforcing the idea that this misery, or impending misery in AtwoodÃ¢â¬â¢s cause, is entirely self-inflicted by humans. Ã¢â¬Å"Mind-forgedÃ¢â¬ gives the idea that people are trapped by their own actions, and are possibly so brainwashed by the authorities striving for the glory of industrialisation, that even though they see themselves as helpless, they do not even consider the possibility of rebelling. This also has a sense of a loss of freedom and free will.The main feeling, I believe, conveying in both poems is blame on humans for our actions and the idea of a need for change soon before we have to face the consequences.
Saturday, November 23, 2019
Everybody Speaks Hamlet Everybody Speaks Hamlet Everybody Speaks Hamlet By Maeve Maddox Someone once said that every generation has its favorite Shakespeare play. Hamlet was a favorite with the Victorians. Macbeth enjoyed a great popularity in the first half of the 20th century; Othello in the second half. It seems to me that King Lear may be the play that will come to be associated with the early 21st century. Whatever the general trend, Hamlet is always near the top of Shakespeare favorites. As a result, quite apart from the famous To be or not to be and What a work is man soliloquies, many of the speeches, lines, and phrases have become embedded in our everyday speech. English speakers who have never read the play or seen it acted are likely to use one or more of the following expressions or some form or another: To thine own self be true Though this be madness, yet there is is method in t. The lady doth protest too much, methinks In my minds eye The plays the thing Frailty, thy name is woman! Neither a borrower nor a lender be to the manner born Alas, poor Yorick! Ay, theres the rub Brevity is the soul of wit Conscience does make cowards of us all Dog will have its day Get thee to a nunnery Hoist with his own petard in my heart of hearts It smells to heaven murder most foul Sweets to the sweet Not a mouse stirring something is rotten in the state of Denmark Want to improve your English in five minutes a day? Get a subscription and start receiving our writing tips and exercises daily! Keep learning! Browse the Expressions category, check our popular posts, or choose a related post below:Comma After i.e. and e.g.On Behalf Of vs. In Behalf OfThe Difference Between "Shade" and "Shadow"
Thursday, November 21, 2019
Cameron Mackintosh's contribution to the development of the megamusical - Essay Example This paper further highlights the legacy of MackintoshÃ¢â¬â¢s transformation of musical theatre through the increasing importance attached to the marketing of megamusicals; which in turn has fuelled debate as to the repercussions of the megamusical for the musical as an art form as opposed to a corporate controlled money spinner. In considering MackintoshÃ¢â¬â¢s contribution to the megamusical, it is imperative to consider the contemporary framework for the business of theatre production in LondonÃ¢â¬â¢s West End and Broadway. For example, if we contextually consider the theatre market in the West End, recent hit shows from the Sound of Music to Joseph have driven the reversal in fortune of West End theatres, which had suffered a trend in declining ticket revenue and profits in the last decade. In January 2008, the Society of London Theatre announced a record breaking year in 2007 with more than 13.6 million theatregoers generating total tickets sales of almost Ã £470 million, passing the Ã £400 million mark for the first time. Furthermore, the SocietyÃ¢â¬â¢s Chief executive Richard Pulford cited the revenue statistics as an Ã¢â¬Å"annus mirabilisÃ¢â¬ for London theatre, stating that Ã¢â¬Å"these figures are a wonderful start to our centenary year but weÃ¢â¬â¢re under no illusions that weÃ¢â¬â¢re going to have to work very hard to maintain this successÃ¢â¬ (Maev Kennedy., 2008).
Wednesday, November 20, 2019
Hamlet - Essay Example The complexity of action as well as the impossibility of certainty is prominently highlighted when it comes to discussing the execution of revenge by Hamlet, the protagonist in ShakespeareÃ¢â¬â¢s Hamlet. The lack of self-confidence and hindrance of inaction of the protagonist distinguishes the play remarkably apart from other revenge plays in English literature. Shakespeare portrays Hamlet as an able yet reluctant hero who is characteristically more prone to apprehension than to action. This is the case of his dilemma: of realizing the truth behind his fatherÃ¢â¬â¢s murder followed by the ghostly encounter, of acknowledging the plan of revenge and yet choosing to postpone this action. This thin demarcation between action and inaction is prominently expressed in the innermost thoughts of Hamlets, what is more appropriately known as HamletÃ¢â¬â¢s soliloquies or his self-conversation. Among the soliloquies of Hamlet in the play, the most debated one expressing the protagonistÃ¢â¬â¢s innermost projections is the Ã¢â¬Å"To be or not to beÃ¢â¬ soliloquy from Act III, Scene I of Hamlet. It most undoubtedly holds the central place of the entire discussion of action and inaction on the part of the protagonist for planning his Ã¢â¬ËrevengeÃ¢â¬â¢. Indeed the soliloquies speak of more action than does the protagonist himself. In DaviesÃ¢â¬â¢ (2008) words, Ã¢â¬Å"Hamlet is rarely more dynamic or on the move as a character than in the action of his soliloquies, which remain the vehicles for an unfolding Ã¢â¬Ëdrama of thoughtÃ¢â¬â¢ throughout Hamlet rather than expressions of a fixed kind of Ã¢â¬Ëdramatized thinkingÃ¢â¬â¢. In soliloquy, we have the Hamlet who is ready Ã¢â¬Ëto drink hot bloodÃ¢â¬â¢ in Act III, Scene II, and yet who refuses to kill Claudius in Act III, Scene III; who knows not why he lives Ã¢â¬Ëto say this thingÃ¢â¬â¢s to doÃ¢â¬â¢ in Act IV, Scene IV, but even at this most hopeless point, implicitly recognizes that
Sunday, November 17, 2019
W2CapD Vision and Mission - Essay Example e benefit Ã¢â¬â a vision statement gives the picture of the preferred futureÃ¢â¬ ¦ the vision is a statement that describes how the future will look if the organization meets its missionÃ¢â¬ (Wilkinson, 2013, p. 1). Thus, the mission statement defines the specific strategies that are to be undertaken to ensure that the vision is achieved. Values play a crucial role in the vision and mission of an organization. The beliefs, principles, and philosophies of the officers and leaders in the organization influence the manner by which vision and mission statements are designed. As emphasized, Ã¢â¬Å"vision and mission statements should articulate the essence of your organizations beliefs and values and define its place in the worldÃ¢â¬ (Foundation Center, 2015, p. 1). Likewise, core values are further asserted as the Ã¢â¬Å"the principles and standards at the very center of our character, and from which we will not budge or stray. (As such), even though we frequently talk about mission and vision first, the basic underlying foundation for both are our core valuesÃ¢â¬ (Grusenmeyer, n.d., p. 2). As such, the theoretical or conceptual framework which becomes the foundation of the mission and vision statements are the values set ingrained in the incorporating owners or members of the organization. What they believe they n eed or want to achieve in the long term would define the mission and vision that would be explicitly communicated to the rest of the stakeholders. Wilkinson, M. (2013, January 30). ThereÃ¢â¬â¢s a difference: mission v. vision. Retrieved from managementhelp.org:
Friday, November 15, 2019
Foreign Exchange Risk Management In Multinational Corporations Finance Essay Corporations (MNCs) Introduction: Globalisation has had economic, cultural, technological and political effects. Over the last few decades the increase in globalisation has led to rapid growth in several industries around the world and it has also had a strong influence on the flexibility of firms. Hundreds of new MNCs have emerged globally due to the liberalisation of trade and capital markets. MNCs are not limited to the big firms with huge investments like Coca Cola, Nike and Shell, due to advances in technology and liberal markets many small firms operate internationally to maximise their profits. This growth has highlighted the various risks faced by MNCs operating in different countries. One such risk is the financial risk involved with the foreign currency exchange markets. Most of the time MNCs deal in more than one national currency and hence the changes in the foreign exchange rates can have an adverse effect on the firms profits. This paper discusses the various foreign exchange risks faced by multinationa ls around the globe and the necessary steps taken to manage these risks. A study on the Malaysian MNCs has also been covered in the paper. Foreign Exchange Risks: Foreign Exchange risks also known as exposures can be termed as an agreed, projected or contingent cash flow whose scale is not certain at the moment. The magnitude depends on the value of the changes in the foreign exchange rates which in turn depends on various variables such as the interest rate parity, purchasing power parity, speculations and government policies on exchange rates. According to G.Shoup (1998), a company has exposure if there is a currency mismatch in some aspect of the business such that a shift in foreign exchange rates, nominal or real, affect its performance either positively or negatively. These exposures may be classified into three different categories: Translation exposure Transaction exposure Economic exposure Translation Exposure; this is the net asset/liability exposure in the home currency of the MNC. In other words, it is the profit gained or loss incurred in translating foreign currency financial statements of foreign subsidiaries of the MNC into a single currency which it uses in its final reports (Yazid Muda, 2006). In essence, translation risk can be defined as the effect of exchange rates on the figures shown on the parent companys consolidated balance sheet. Although this exposure does not affect the shareholders equity, it does influence the investors due to the changing values of the assets or liabilities. (Shoup, 1998) Transaction Exposure; it is a risk associated with a transaction that has already been contracted. It is as a result of unexpected changes in foreign exchange rates affecting future cash flows which the MNC has already committed itself to. Usually MNCs enter an international contractual obligation, the payment or receipt of which is expected on a future date, hence any change in the foreign exchange rate during that period will expose the MNC to transaction risks. Transaction risks can be easily identified and thus get more attention from the financial managers. (Eiteman, Stonehill, Moffett, 2007) Economic Exposure; this is the most complex risk as it not only involves the known cash flows but also future unknown cash flows, hence also termed as a hidden risk. It is a comprehensive measure of a companys foreign exchange exposure and therefore sometimes termed as a combination of translation and transaction exposure. Identifying economic risks involves measuring the change in the present value of the company resulting from any changes in the future operating cash flows of the firm caused either by adverse or desirable change in the exchange rate. (Eiteman, Stonehill, Moffett, 2007). As Dhanani (2000) noted, economic risk can be viewed as the consequence of long-term exchange rate fluctuations on a firms predicted cash flows and as the cash flows linked to the risk are not certain to materialize, the risk is hard to identify. Economic exposure to a MNC may last for a long duration making it difficult to be quantified and hence limiting the use of possible management techniques. (Shoup, 1998) Foreign Exchange Risk Management Foreign exchange risk management is a process which involves identifying areas in the operations of the MNC which may be subject to foreign exchange exposure, studying and analysing the exposure and finally selecting the most appropriate technique to eliminate the affects of these exposures to the final performance of the company. (Shoup, 1998) Risks involving short term transactions can be dealt with using financial instruments but long term risks often require changes in the operations of the company. As in the case of translation exposure the MNC can have an equal amount of exposed foreign currency assets and liabilities. By doing so the company will be able to offset any gain or loss it may have due to changes in the exchange rates of that currency, also known as balance sheet hedging. (Eiteman, Stonehill, Moffett, 2007) In dealing with economic exposures efficiently, a MNC may have to diversify either its finance or its operations. It can diversify its operations by either moving to locations where the cost of production is low, or having a flexible supplier policy, or changing the target market for its products and the types of products it deals in. As it can be illustrated from the 1994 example of Toyota, when a strong Yen made Japanese exports to US more expensive, it decided to shift its production from Japan to US, where it achieved comparatively lower costs of production, enabling it to compete in the US car market. (Eun Resnick, 2007) The management of transaction exposures may either involve hedging using special techniques or applying pro-active policies. The pro-active policies commonly used include (Eiteman, Stonehill, Moffett, 2007): Matching currency cash flow Risk sharing agreements Back to back loans Currency swaps Lead and Lag payments Use of re-invoicing centres Hedging is the act of protecting a pre-existing position in the spot market by trading in derivative securities; that is guarding of existing assets from future losses. According to Eiteman et al (2007), hedging is the taking of a position, acquiring a cash flow, an asset or a contract that will rise or fall in value and hence offset a fall or rise in value of an existing position. Several studies on this issue have emphasized that MNCs have a higher probability of facing exchange rate volatility in their operations as they expand their involvement throughout the world. Therefore, the extensive use of various hedging techniques by most companies has been widely recognized to ensure the companys overall interests, cash flows and equity are safeguarded. Some of the most commonly used hedging techniques include: Forward market hedge Money market hedge Options market hedge Forward market hedge; this is the case where the MNC in the forward contract has a legal obligation to buy or sell a given amount of foreign currency at a specific future date which is known as the contract maturity date at a price agreed upon at present. (Nitzche Cuthbertson, 2001) Money market hedge; under this hedging technique, the transaction exposure can be hedged by lending and borrowing in the local and foreign markets. For instance a MNC may borrow in a foreign currency to hedge the amount it expects to receive in that currency at a later date and similarly it could lend to hedge payables in a foreign currency. By doing so, the MNC will be matching its assets and liabilities in the same currency. (Eun Resnick, 2007) Options market hedge; this is a technique used by a MNC which gives it the right but not the obligation to buy or sell a specific amount of foreign currency at a specific price, by or on a specific date. Although not a widely used tool, it can be useful when a MNC is uncertain about the future receipt or payments of foreign currency. (Nitzche Cuthbertson, 2001) Hedging helps in reducing the risks involved in international transactions and also improves planning capability. By hedging a MNC can ensure its cash flow does not fall below a necessary minimum, particularly in cases where there is a tendency of a company to run out of cash for necessary investments (Eiteman, Stonehill, Moffett, 2007). A very good example would be that of Merck, a pharmaceutical company. Kearney and Lewent (1993) identified that Merck was one of the pioneers to have used hedging to ensure that its key investment plans could always be financed, which in their case was the research and development aspect of their business. Mathur (1982) came to the conclusion that, to decrease the negative outcomes caused by fluctuations of foreign exchange rate on earnings and cash flows, most companies employ a hedging program. He also noted that a formal foreign exchange management policy is more common among larger firms. According to Bartov et al (1996), if MNCs do not institut e a hedging program, they are more likely to be exposed to risks which may result in substantial losses. Despite its advantages, hedging does not increase the companys expected cash flows, on the other hand it uses up the company resources in the process (Eiteman, Stonehill, Moffett, 2007). According to G.Shoup (1998), unless there are clear defined objectives, safeguards in place and clear communication at every level of management, a hedging program may turn into a disaster. As the chairman of Zenith Electronic Corporations, Jerry K Pearlman once said, It is a, damned if you do and damned if you dont situation. (Shoup, 1998, p15.) In 1984, Lufthansa a German airline company placed a major purchase order for airlines from an American firm. The financial managers at Lufthansa had forecasted a stronger dollar in the days to come and therefore locked up the German Duetsche mark against the American dollar. Due to an unfavourable effect, a weak dollar, in one year Lufthansa lost around US$150 million and half of the financial managers team lost their jobs (Shoup, 1998). In another instance, two years later in 1986, the chairman of Porche found himself unemployed as he had engineered the company into a dependence on the US market for 61% of its revenue without hedging against a downturn in US$, as a result forcing Porche to suffer major financial losses. (Shoup, 1998) According to a study by Marshall (2000), the trend in the objectives of managing foreign exchange risks was quite similar between the UK and US multinationals who gave significant importance to certainty of cash flow as well as minimising fluctuations in earnings. On the other hand, a higher number of Asian multinationals managed these risks to minimise fluctuations in their earnings. The trend observed is summarised in Figure 1 below. Figure 1: Foreign exchange risk management in UK, USA and Asia Pacific multinational companies by Andrew P Marshall, Journal of Multinational Financial Management, 2000. Belk and Glaum (1990) undertook a study which involved investigating several UK MNCs. The study revealed that although majority of the companies considered translation exposure to be important, not all were prepared to hedge this risk actively. On the other hand transaction exposure was given most importance in the management of foreign exchange risks. The level of hedging the transaction exposure varied between the companies investigated, some hedged totally while others did so partially. The study also seemed to show that the size if the MNC influenced its involvement in foreign exchange risk management, the larger the company the higher the propensity. In another study carried out by Makar and Huffmann (1997), it was found that there is a linear relationship between the amount of foreign exchange derivatives employed and the degree of foreign currency exposure in US MNCs. Foreign Exchange Risk Management in Malaysian Multinational Corporations (MNCs) During the financial crisis of 1997, most Malaysian MNCs suffered foreign exchange losses due to currency fluctuations, thus leading to the increased involvement of Malaysian MNCs in foreign exchange risk management (Yazid Muda, 2006). It can be seen that before the financial crisis fewer MNCs considered hedging their foreign exchange risks to be vital, as the General Manager of the Malaysian Monetary Exchange Bhd indicated that local MNCs were very passive and reactive in managing their financial risks (New Strait Times, 30 May 1998: 11). A similar statement was given by the then Minister for International Trade and Industry, Rafidah Aziz, which implied that MNCs should manage their foreign exchange risks well (New Strait Times, 3 July 1998). A very good example of the losses suffered would be that by Malaysian Airline System (MAS), MAS lost around M$400 million in the first half of 1998 because of its foreign debt of about M$3.16 billion. Yazid and Muda (2006) studied 90 out of th e then 113 MNCs listed under the Bursa Malaysia. The main objectives cited by MNCs in this study relating to the foreign exchange risk management were to minimise the following; Losses on operational cash flow Cash flow fluctuations Losses on consolidated balance sheet Losses on shareholders equity Business uncertainty Foreign exchange risk to a comfortable level According to Yazid and Muda (2006), Malaysian MNCs became very proactive in managing their foreign exchange risks during the financial crisis and once the crisis was over, the priority attributed to foreign exchange risk management decreased slightly but not to the point it was before the crisis. This has been illustrated as a summarised result of the survey shown in table 1. Objectives Before During Current Minimise Losses on operational cash flow 3.59 4.62 4.09 Minimise Cash flow fluctuations 3.29 4.41 3.88 Minimise Losses on consolidated balance sheet 3.26 3.91 3.82 Minimise Losses on shareholders equity 3.24 3.56 3.50 Minimise Business uncertainty 3.21 3.50 3.41 Minimise Foreign exchange risk to a comfortable level 2.91 3.53 3.29 Table 1 (Yazid and Muda, 2006) Note: The results are based on five-point progressive Likert scale (1 is the least important; 5 is the most important) Large MNCs in Malaysia are more likely to get involved in foreign exchange risk management compared to smaller firms or firms with relatively lesser operations outside Malaysia. This trend seems to be consistent with other MNCs around the globe (Yazid et al, 2008). Majority of the Malaysian MNCs centralise their foreign exchange risk management and it can be said that foreign exchange risk management in Malaysia is still at its infant stage in comparison to other MNCs in the west. Their management practices are very informal and no proper documented policies can be found in regard to foreign exchange risks. Although the use of hedging tools is on a steady rise amongst the Malaysian MNCs, the objectives behind their involvement remain uncertain (Yazid and Muda, 2006). The past decade has seen rapid growth of a new segment in the global finance industry, the Islamic finance sector. To qualify for Islamic foreign exchange hedging, transactions must involve tangible assets. Malaysia, which is pre-dominantly an islamic country has highlighted the need of hedging tools which are compliant with Islam. Hence CIMB, a leading Malaysian bank among others, have introduced an Islamic foreign exchange hedging instrument, which would assist their clients to manage their risks. (Reuters, 2008) Astro, which is a leading services provider in the Asian entertainment indutry is based in Malaysia. Being a MNC, foreign transactions are dealt in different foreign currencies other than the Malaysian Ringgit. Consequently, there is an exposure to foreign currency exchange risk. Astro uses foreign currency derivatives such as forward contracts and interest rate swap contracts to hedge currency exchange risks. Forward contracts are commonly used to limit exposure to currency fluctuations on foreign currency receivables and payables as well as on cash flows generated from anticipated transactions denominated in foreign currencies. In 2007 Astro made a loss of RM 137,000 due to foreign exchange fluctuations and henceforth decided to emphasize the use of hedging techniques. This can be proven by Astros estimated principal amounts of outstanding forward contracts which as at 31st January 2009 was RM188,083,636, whereas at the same time a year before it was at RM 5,109,000. The emphasis o n risk management resulted in a substantial gain of RM 7,680,000 for Astro in the year ended 2008. In addition, as Ringgit Malaysia is Astros functional currency; all the financial statements have to be consolidated into this currency. Hence Astro is exposed to translation risk due to the fluctuating exchange rates. According to Table 2.0, the significance of the foreign currency risk management is noticeable as Astro experienced a huge gain in 2008 relative to the loss they suffered in 2007. Table 2.0: ASTRO; Result of Foreign Exchange Risk Management Cash Flow due to Operating Activities 2008 RM000 2007 RM 000 Net Effect of Currency Translation on Cash and Cash Equivalents 4854 (1529) Gain on Realisation of Foreign Forward Contracts 7680 (137) However, hedging of foreign exchange does not always yield a positive result, as illustrated in the case of AirAsia, one of the leading budget airlines in Asia. AirAsia like many international airlines used a technique refered to as fuel hedging, this allows the airline to purchase fuel at a price fixed at an earlier date despite an increase in the fuel price. During the fuel crisis of 2007-2008 when prices rose to over US$150/barrel, AirAsia made a significant loss as it had hedged for fuel prices not to exceed US$90/barrel and as a result AirAsia recorded its first ever full year loss of RM471.7 million for the year ended 31st December 2008, despite achieving a growth of 36.6% in revenue. This led to the removal of all hedges on fuel prices and AirAisa declared itself as completely unghedged. Although AirAsia intends to re-introduce fuel hedging in 2011, for now it deals in spot prices for its fuel. (Leong, 2009) (Ooi, 2008) Conclusion Multinationals are exposed to various kinds of risks, which includes the foreign exchange risk. This risk which is as a result of exchange rate volatility is said to have a pervasive impact on the profitability and certainty of a MNC. Globally, multinationals face translation, transaction and economic risks due to the frenzied system of floating exchange rates. To avoid the adverse effects of these risks, multinationals often take measures which although do not entirely eliminate the losses; they do enable the firms to minimize the losses. Hedging is very common risk management tool used by multinationals and has often resulted in positive results when used after a correct analysis of the exposure is made. Despite its advantages, not all multinationals around the globe decide to manage their risks in this way. The objectives behind foreign exchange risk management and the techniques used to manage are seen to differ across regions. In the case of Malaysian multinationals, foreign exchange risk management is deemed to be at a lower level relative to their counterparts globally. Until recently, majority of the Malaysian multinationals were not actively managing these risks. The Asian financial crisis in the late 1990s had a significant effect on their stance and the level of foreign exchange risk management amongst Malaysian multinationals has since increased considerably.