Managing Currency Risk Exposure : A case study of Svenska Cellulosa AB

• Main Authors: Lindström, David, Säterborg, Erik
• Format: Others
• Language: English
• Published: Umeå universitet, Handelshögskolan vid Umeå universitet 2009
• Subjects: Currency risk management; Hedging; Business studies; Företagsekonomi
• Online Access: http://urn.kb.se/resolve?urn=urn:nbn:se:umu:diva-25164

Introduction: Recent years’ globalization and expanding currency markets have increased the importance of financial managers.  A multinational company handles different currencies through export and imports, and is thus exposed to currency fluctuations. Awareness and assessment of risk management are issues more important not to ignore. Research question: How does the multinational company SCA indentify currency risk exposure, and how does the financial management relate to it? Purpose: The aim of this study is to get a deeper understanding of the currency risk management at a Swedish multinational company and how the individual manager identifies exposure. Furthermore, what means that exist for assessing the exposure and how the management choose to reduce the risk will be investigated. Method: This case study has a qualitative approach, and is mainly based on two unstructured interviews that have been conducted with the financial mangers of SCA. Findings: The authors found that SCA identifies different kinds of exposures related to currency risk. SCA is equipped with organizational strategies as well as practical methods for reducing the risk exposure and positioning themselves in line with company framework and policies. Conclusion:                   Currency risk management is a subject of great complexity since exposures interrelate and alternates with time and as global economy changes. A company could hold a framework of policies, strategies and instruments that will provide their financial managers with means for risk assessment and management. Ultimately the responsibility is still in the hand of the managers.