Introducing Multinational Financial Management

7/22/2019 Introducing Multinational Financial Management

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INTRODU

MULTINATIO

FINANCIAL MANAGEM

DR. SANDEEP KU


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OBJECTIVE OF THE SESSION

To make the students aware of the basics of International Fin

Management

To make the students understand the parameters of Internat

Finance To make the students relate to the topic

To kick start an exciting journey in an interesting subject


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OLD VERSES NEW

GOOD OLD BARTER

SYSTEM

SOPH

INTER

TRAD

OLDNEW


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KEY CHANGES HAPPENED AFTER THE

BARTER SYSTEM

Monetary Currencies replaced the barter system

Telephone communication

Internet and emails

Easy transfer of Funds

Sophisticated technologies

Emergence of large multinational corporations


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ANY GUESSES ON WHAT WE SEE IN

MULTINATIONAL FINANCIAL MANAGEMEN

Export and Import trade dynamics

Multinational Corporations are the important players

Asia and especially China as emerging economic leader

Import and Export Liberalization

Role of the currency


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SOME CHARACTERISTICS OF


Monetary systems influenced primarily by USD, Euro and Pou

Multinational Corporations present in all the leading econom

the world and majority of them are clustered around United

States, European Union, China and Japan

Other large economies like India, Brazil, Russia also pacing up

a pie in the trade volumes of big MNCs

Trade blocks and trade restrictions


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SOME BASICS OF MONETORY SITUATION

In developed countries, because of wealth creation in theeconomy, the value of currency is high compared to developand underdeveloped countries

In developing countries, value of currency is low because the

countries have not been able to create enough wealth (eg: In In underdeveloped Countries, value of currency is lowest be

the countries have not been able to come out of poverty (egAfghanistan)


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LET US TAKE AN EXAMPLE

In US, Finance Manager in a Medium size company gets an averag$80000 per year (Around 48,00000 per annum) and an average cmedium size) would cost around $15000 (Around 900000) which around 18.75% of his annual salary

A Finance Manager in India may get a package of Around Rs 12,00

(let us assume so) and he may buy a WagonR worth Rs 5,50,000, is around 45% of his salary

So the purchasing power is different, hence economies of two coare different and hence the monitory values differ!


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A LITTLE HISTORY OF MULTINATIONAL

CORPORATIONS

(FROM ORIGINS TO SECOND WORLD WAR)

The earliest historical origins of multinational corporations can be trac

the major colonising and imperialist ventures from Western Europe, no

England and Holland, which began in the 16th century and proceeded

next several hundred years. During this period, firms such as the Britis

India Trading Company were formed to promote the trading activities territorial acquisitions of their home countries in the Far East, Africa, a

Americas.


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FROM SECOND WORLD WAR TO NOW

Japanese and European Companies bounced back and startedcompeting with American giants

The US economy flourished and a lot of American MNCs started sup bases in other countries

Asian economies like Malaysia, UAE, Thailand opened up new ven

for foreign investments 1990s gave new economic giants to the world China, India, Braz

Information technology transformed the way businesses work

India became a IT superpower


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IMPORTANCE OF STUDYING


A window of the world for a Finance Professional

Understand how International Financial sector works, specifi

with MNCs being dominant players

International Trade Financing and its importance for globaleconomy

An important subject for Finance Majors in Business schools


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INSTANT CLASSWORK

Search on the Internet and find out as to why Rupee was we

the last month

Can you describe the impact of Blackberrys decision to cut j What is the export situation for India


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Thank [email protected]
mailto:[email protected]:[email protected]

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Introducing Multinational Financial Management