Financial risks management practices of multinational companies in Ghana

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This study sought to find out the management practices employed by multinationals in Ghana in controlling the financial risks they are exposed to. It also assessed the management practices used by multinationals in the recent financial crisis. This study is relevant since multinationals located in developing countries operate under different business environment and economies as compared to developed economies. Hence, multinational companies in developing countries should control financial risk by using management practices conducive for the environment they operate in. The study made use of interviews as the method used in collecting data. Data collected was then grouped and analysed according to the common management practices. Analysis generated from the data collected concluded that, interest rate risks and exchange rate risks were the most common financial risks the companies face. In managing these risks, management set limit within which the company can absorb risks as the first step in controlling financial risks. The study also identified hedging tools such as options, forwards and future contracts as dominant management practices in controlling financial risk.
Thesis submitted to the Department of Business Administration, Ashesi University College, in partial fulfillment of Bachelor of Science degree in Business Administration, April 2010
Ghana, financial risk management, multinational companies, interest rates, exchange rates