Strategies of Indian Firms in Coping With Forex Risk Management: An Inquiry Through Case-Research Method


Affiliations

  • Shanti Business School, Ahmedabad, India
  • Sardar Patel University, GH Patel Institute of Management Studies, Vallabh Vidya Nagar, India

Abstract

More and more Indian firms are becoming global in their operations - through exports and imports, by setting up manufacturing plants abroad and through joint-ventures and tie-ups. In this process most of them are dealing with multiple currencies. This has increased the overall exposure of Indian firms to foreign exchange-rate fluctuations. How have they been coping with the risk associated with the exchange-rate fluctuations? In order to explore this, the authors have engaged the case-research method. The authors studied 64 cases for this purpose. Of these 27, firms have been handling forex exposure and/or have had at least one near-crisis situation in the past. The remaining 37 cases are Indian firms from sectors like Textiles, IT, Gems and Jewelry, Pharma, Engineering, FMCG and Energy. The study focused on the context of these firms, their business model, the sources of forex exposure and the policies and practices of managing forex exposure risk. The authors have tried to identify the basic factors underlying the forex exposure and to identify patterns, if any, in the coping-strategy. They conclude that the insights would help formulate a generic strategy.

Keywords

Case-Research Method, Forex Risk Management, Coping-Strategy.

Subject Discipline

Financial management

Full Text:

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