You are the financial officer of a U.S. business conducting operations in Mexico. The business has been financed by loans obtained from U.S. banking institutions. You have been informed the Peso is expected to drop by 30 percent against the U.S. dollar over the next year. What actions, if any, should you take and why?
The oscillations of currency are one of the main factors that should be considered by a financial officer. Especially important it becomes if he/she conducts operations in different states. The fact is that the alteration of the US dollar position that is used as the international currency affects numerous spheres. As for the situation, the business is sponsored by US banking institutions which means that the US dollar is used as the main currency. However, the loan is guaranteed by the Peso, and it is going to drop by 30 percent, so the dollar becomes more powerful. That is why the best way to respond to this situation is to avoid any radical actions and continue monitoring (Rickards, 2012). It will help to preserve the current position and avoid a serious crisis. Moreover, the increase of the business dollar value could even have a positive impact on the economy by promoting its rise as a bigger part of the investment is paid by the US dollar which becomes more powerful (Rickards, 2012).
What is the link between an international business strategy and its human resource policies, about expatriate employees and their compensation?
There is a direct correlation between the international business strategy and human resource policies related to expatriate employees. In case a company wants to attract the attention of the most skilled and experienced foreign workers, it increases rewards and provides the best working conditions for those who want to work with it. At the same time, if there is no great need for employees of this sort, a company might refuse to alter its policy for a better one and preserve the current approach preferring to save costs (Mathis, Jackson, & Valentine, 2013). In other words, the demand for the expatriate employees preconditions the approach used to cooperate with them and rewarding policy.
References
Mathis, R., Jackson, J., & Valentine, S. (2013). Human resource management. Boston, MA: Cengage Learning.
Rickards, J. (2012). Currency wars: The making of the next global crisis. New York, NY: Portfolio.