The Director of Finance, William Seaton, has invited you into his office.
"This will come as a bit of a shock, but the Board has decided that it would be in our best interests to relocate our Head Office from Kayland to the Middle East. We have interests there, including a regional office, already. We know that the oil industry is welcome and there are several governments which are very open to such foreign direct investment from the West.
Nothing has been decided for certain, but there are compelling tax advantages to us relocating. We would also be subject to slightly less restrictive legal requirements. We can retain our listing on the Kayland stock exchange, albeit as a foreign company.
Things are very much under consideration at the moment, so please don't tell anybody about this conversation.
I want to check that I have thought of everything at the strategic level before we make an irreversible decision to move. I need you to write me a report on the following:
* What are the strategic implications of moving our Head Office from Europe to the Middle East?
* What are the strategic risks that might arise and how might we deal with them?
I need to have your thoughts soon because the Board is holding a special meeting this afternoon."

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You have received the following email from Marcus Svenson, Finance Director:
From: Marcus Svenson, Finance Director
To: Senior Finance Manager
FW: Pricing
Hi,
I am forwarding an email from Sarah Johns.
Sarah has not been with us for very long and this is her first experience of dealing with a currency price movement.
I am really busy, so I need you to respond to her requests. Please email her as soon as possible.
Marcus
From: Sarah Johns, Marketing Director
To: Marcus Svenson, Finance Director
Subject: USD movement
Hi Marcus,
A lot of our biggest customers are threatening to cancel orders unless we reduce our selling prices. Timber and associated products are commodity items that are priced in USD, so I thought that our prices would automatically remain competitive regardless of what happened to the USD. I am particularly confused over domestic sales, because many of the customers who have threatened to cancel are based in this country and we invoice them in M$.
Please help me to understand why the M$/USD exchange rate can affect our competitive position in this way.
I also wish to know why you have chosen to do nothing to hedge against this risk. If you look at the attached article you will see that the USD is an issue in the business news.
Sarah

Newsweb
Protesters block bulldozers
Attempts by Wodd to harvest some of the hardwood trees from their newly acquired Bravadorian forest suffered a further setback yesterday.
Wodd's bulldozers have been unable to make any headway in clearing the site for the company's first logging base because environmental groups from several countries have descended on the Bravadorian jungle to protest the proposed destruction of the forest and the associated harvesting of many rare hardwood trees. Protestors have chained themselves to trees and to heavy equipment, making it impossible to commence the clearance operations.
Wodd's problems have been compounded by the recent discovery that a tribe of forest dwellers has lived in the forest for many generations, making little or no contact with the outside world in the process. The tribe is effectively nomadic, moving from one part of the forest to another, surviving by hunting game and gathering edible vegetation and relocating when food starts to become scarce. The environmental protestors claim that Wodd's activities will make it impossible for this tribe to continue with its traditional way of life.
Wodd claims to adhere to The Forestry Stewardship Council of Marland's ten principles, which include the assurance that "The legal and customary rights of indigenous peoples to own, use and manage their lands, territories, and resources shall be recognized and respected." Reference Material:

From: Abdhulla Al- Waihabi, Regional Manager - Middle East - Slide
To: William Seaton, Director of Finance
Subject: Press article
Hi William,
I have just had a telephone call from a journalist at Business News to ask for a comment on a story that it plans to run. As you know, we purchased oil wells in the AZ40 field last year in order to bring them back to full production. We got the wells for a good price because the previous owner was struggling to maintain oil pressure and it appeared that the recoverable reserves in that field were close to exhaustion. Our experts worked out a plan to drill a hole and pump water into the well to force more oil to the surface. That is a standard industry technique. Our geologists are the best in the industry and so we are better than most at bringing wells back on stream.
It now appears that we are being blamed for an environmental catastrophe. Our pumping station is only one kilometre from the sea and there are reports of oil coming to the surface along the coast close to where we are operating. We have only just started operations and there are fears that we have ruptured a rock formation with our high pressure pumping.
I have ordered an immediate halt to all pumping activity, but the oil could continue to bubble up for years. The coastal area has some important coral reefs and there are fishermen who depend on shellfish that can be found there.
I told the journalist that she would have to wait for a response from Slide's Board. Business News is a European newspaper, so any comment from you will carry more weight anyway.
I am sorry to be the bearer of such bad news.
Abdhulla

Four weeks have passed since your encounter with the Chairman. The directors of both companies were informed of the proposal to merge two weeks ago and the public was informed two days ago.
You have received the following email from Marcus Svenson, Finance Director:
From: Marcus Svenson, Finance Director
To: Senior Finance Manager
Subject: Merger negotiations
Hi,
Please see the attached table and also a comment that I downloaded from a Wodd shareholder's blog, showing the market capitalisations for Wodd and Darrell both before and after the merger announcement.
If I am reading this correctly, it would appear that we are suffering at the hands of Darrell because the market believes that it is getting more of the benefit from the merger. This is before the terms of the merger have even been announced.
I need you to do two things:
Please draft a formal response to Market Blogger's post. We will insert this into his blog as a formal response from Wodd's Board and we will also email it to all shareholders.
Please draft an outline strategy for negotiating with Darrell's Board. Clearly, I want Wodd's shareholders to get the best possible deal out of this merger.
Marcus
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