Challenges of implemention of foreign exchange risk management strategies on performance of donor funded projects at Aga khan foundation, East Africa
Every business large or small must have a strategy that outlines the neatly devised plan of realizing the business vision and achieving the organizational goals. The lack of a robust strategy means the organization does not have a clear roadmap that guides it to success. The purpose of this study is to identify the challenges facing Aga Khan Foundation, East Africa in the implementation of foreign exchange risk management strategies and their impact on performance of donor funded projects within the organization. The research adopted a case study design. Data was collected through interviews with key managers and officers within the organization as respondents to the study. The data collected was analysed using the content analysis technique. The study identified the most frequent challenges facing the organization in implementation of foreign exchange risk management strategy to include; the lack of a clear written strategy, the lack of internal capacity to support the implementation of the strategy, the highly volatile nature of economic market the organization operates in, failure by management to understand the concept of foreign exchange risk management among others. As a result of these challenges, the organization has experienced income variability for some projects which has threatened the quality of project deliverables. The study also proposed measures that could be taken overcome the challenges identified above to include; the development of a clear strategy, the engagement of expert services to provide capacity support in foreign exchange risk management strategy formulation, implementation and monitoring among others. In conclusion, there are several challenges that can harm the successful implementation of a good strategy. However, using right methods, frameworks and timing may reduce or minimize these challenges.
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