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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
MULTINATIONAL FINANCIAL MANAGEMEN
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
MULTINATIONAL FINANCIAL MANAGEMEN
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]