imported>Doug Williamson |
imported>Doug Williamson |
Line 1: |
Line 1: |
| ''Behavioural skills - avoiding cognitive bias - group confirmation bias''. | | ''Foreign exchange risk management'' |
|
| |
|
| Groupthink is a form of dysfunctional decision-making, resulting from an excessive focus on harmony or conformity within a group, at the cost of reaching consensus decisions without enough critical evaluation.
| | 1. |
|
| |
|
| It is closely related to confirmation bias.
| | Pre-transaction foreign exchange risk arises from needing to commit to a price before actually entering into transactions or commercial agreements. |
|
| |
|
| | For example, an exporter may need to publish a price list in the currency of its customers' local market. |
|
| |
|
| Solutions to groupthink include increasing diversity in the group.
| | Pre-transactional currency exposure also exists when an organisation tenders for a contract priced in a foreign currency, or where there are associated foreign currency costs, for example for materials, labour or other operational inputs. |
|
| |
|
| | Some practitioners do not identify pre-transaction risk as a separate class of risk, rather considering it to be a shorter-term type of economic exposure. |
|
| |
|
| :<span style="color:#4B0082">'''''Use your own judgement in the New Normal'''''</span>
| |
|
| |
|
| :"It’s tempting to see the release from [Covid] lockdown as the corporate equivalent of going back to your favourite restaurant.
| | 2. |
|
| |
|
| :For many businesses it won’t be anything of the kind.
| | The same as Contingent risk as applied to currency management. |
| | |
| :Here’s how to make better choices to navigate the new normal...
| |
| | |
| | |
| :Because we want something to be so doesn’t mean it will be.
| |
| | |
| :Some of us are pessimists, some optimists, and it’s more comfortable talking to those we agree with.
| |
| | |
| :These feelings should not get in the way of a cool look at the realities.
| |
| | |
| :Property company Shaftesbury, heavily involved in problematic London retail areas, talks about strategic acquisitions and selective disposals.
| |
| | |
| :Avoid wishful thinking or groupthink."
| |
| | |
| :''Sir Andrew Likierman, professor of management practice, London Business School - The Treasurer, Issue 2, June 2021, p39''
| |
|
| |
|
|
| |
|
| == See also == | | == See also == |
| * [[Acquisition]] | | * [[Contingent risk]] |
| * [[Affinity bias]] | | * [[Currency risk]] |
| * [[Bandwagon bias]] | | * [[Economic exposure]] |
| * [[Behavioural economics]] | | * [[Transaction exposure]] |
| * [[Behavioural skills]]
| |
| * [[Choice supporting bias]]
| |
| * [[Cognitive bias]]
| |
| * [[Confirmation bias]]
| |
| * [[COVID-19]]
| |
| * [[Critical evaluation]]
| |
| * [[Default bias]]
| |
| * [[Diversity]]
| |
| * [[Dunning-Kruger effect]]
| |
| * [[Emotional intelligence]]
| |
| * [[Executive coaching]]
| |
| * [[Hindsight bias]]
| |
| * [[Horizon scanning]]
| |
| * [[Lockdown]]
| |
| * [[Maslow's hammer]]
| |
| * [[Objectivity]]
| |
| * [[Optimism bias]]
| |
| * [[Reactance bias]]
| |
| * [[Self-investment bias]]
| |
| * [[Self-serving bias]]
| |
| * [[Social bias]]
| |
| * [[Source bias]]
| |
| * [[Status quo bias]]
| |
| * [[Working effectively with others]]
| |
|
| |
|
| [[Category:Commercial_drive_and_organisation]]
| |
| [[Category:Influencing]]
| |
| [[Category:Self_management_and_accountability]]
| |
| [[Category:Working_effectively_with_others]]
| |
| [[Category:Financial_management]]
| |
| [[Category:Knowledge_and_information_management]]
| |
| [[Category:Planning_and_projects]]
| |
| [[Category:The_business_context]]
| |
| [[Category:Identify_and_assess_risks]]
| |
| [[Category:Manage_risks]] | | [[Category:Manage_risks]] |
| [[Category:Risk_frameworks]]
| |
| [[Category:Risk_reporting]]
| |
| [[Category:Treasury_operations_infrastructure]]
| |
Foreign exchange risk management
1.
Pre-transaction foreign exchange risk arises from needing to commit to a price before actually entering into transactions or commercial agreements.
For example, an exporter may need to publish a price list in the currency of its customers' local market.
Pre-transactional currency exposure also exists when an organisation tenders for a contract priced in a foreign currency, or where there are associated foreign currency costs, for example for materials, labour or other operational inputs.
Some practitioners do not identify pre-transaction risk as a separate class of risk, rather considering it to be a shorter-term type of economic exposure.
2.
The same as Contingent risk as applied to currency management.
See also