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6
6. Provide an example of how historical trends in society have influenced a development in management and organization theory
Question 2: An Indian company has an export exposure of Japanese Yen (JPY) 18, 00,000 in July 2020, payable on 30th September 2020. The current spot rates are. INR/US$ = Rs 62.22/ 80 and JPY/US$ = JPY102.24/ 95 It is expected that JPY will depreciate by 10% and Indian Rupee (INR) will appreciate by 5% against U.S. Dollar (US$). The Forward rates quoted for 30th September 2020 are. INR USS = Rs 66.50/ 75 and JPY/US$ = JPY 110.05/85 You are required to compute, expected gain loss if forward cover is undertaken in trade?
Expert Solution
historical trends gives a big picture of the society and organization today.
it gives a way to strategic thinking and conceptual ways of modern management practices.
3 major factors which influece the management and organization theory today are:
social factors which include the demographic factors like sex ratio, age and cultural factors
political factors whch include the political laws and policies
economic factors include the income of the group and spending ability
Historical trend gives us the stepping stones in framing the management and organization theory today.
there are lots of management theories today and they are all evolved from the historic trend and reaction to the various theories.
the 2 recent historical trends that evolved managemnt theories are
1. systems theory
2. contingency theory
system theory emphasizes on considering an organization a human body. if all parts of the human body works well, the human is healthy and sound, so is the organization. all the systems and part of organization should work well to make the organization smooth going process.
2. contingency theory focuses on constant changing business environment. as external environment is changing with respect to demographic, social, cultural, economic, politoical factors, the organization's environment should also change respectively.
with time new technology evolve, policies change accordingly the organization has to adapt.
the latest coronavirus pandemic can make a way for more healthy working environment with respect to hygeinic, social distancing, protection and sanitization in future organization and management theory.
the management practices would become more digitalized and communication and feedback process more electronic.
| JPY to be received | = | 18,00,000 | ||
| Spot Rates | ||||
| INR/USD | = | 62.22/80 | ||
| JPY/USD | = | 102.24/95 | ||
| JPY will Depreciate by 10% & INR will appreciate by 5% | ||||
| Expected Spot Rates as on 30th Sep 2020 | ||||
| INR/USD | = | 59.11/66 | (62.22-5%) | (62.80-5%) |
| JPY/USD | = | 112.46/113.245 | (102.24+10%) | (102.95+10%) |
| Forward Rates on 30th Sep 2020 | ||||
| INR/USD | = | 66.50/75 | ||
| JPY/USD | = | 110.05/85 | ||
| For JPY/USD | Ask rate | |||
| For INR/USD | Bid rate | |||
| INR/JPY Spot Rate | = | 113.24/59.11 | ||
| = | 1.915750296 | |||
| INR/JPY Forward Rate | = | 110.85/66.50 | ||
| = | 1.666917293 | |||
| Exchange Gain or Loss on Forward Cover | = | 1800000 JPY X (1.6669-1.9157) | ||
| = | -4,47,840 | |||
| Loss on Forward Cover | = | 4,47,840 |
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