Jason Heyland Global Financial Management Unit 3 Discuss

Jason Heylandglobal Financial Management Fin630unit 3 Discussion Boar

Jason Heyland Global Financial Management: FIN630 Unit 3 Discussion Board – Part 1 It has been very beneficial that majority our assignments are leading up to the Unit 5 individual project. Looking at the project on its own can be somewhat intimidating. However, over the course of completing some of these projects I have learned it’s best to break them up and try to cover some of the material each week. And just being honest here, I am just getting started on my Unit 5 project. The financial classes can at times, seem overwhelming, so I thought it would be in my best interest to learn the material over the first couple units to get a solid grasp on the material to ensure confidence throughout the project.

My first hurdle is to decide if I will be selecting a company within the European Union or a company that is outside of the union. To do this I really need to figure out the advantages and disadvantages of being a member of the EU. My thought at this point is to select a company within the EU, but I’m still figuring that out. Once that decision is made, that is when the research really begins. There are several advantages and disadvantages so digging in and getting a full understanding of the why’s and why not’s is very important.

In conducting my research, the findings will be identified and noted in my outline so all the information is in an easy to understand format to get my ideas across clearly and concisely. Please see below for a preliminary outline of my project. Hence the word preliminary! I tend to add quite a bit to my outlines as I work through the material. What you see below is basic, but plenty to get me started.

Outline

1. Introduction

2. Conduct research to decide if it’s best to go with a company within the EU or outside the EU.

3. Make the decision and decide on a company that’s within or outside the EU

4. Identify the findings and explain the pros and cons of the decision I made.

5. Explain the pros and cons of the option I didn’t choose and why.

6. Give explanation to why a multinational corporation may invest outside its own country and why.

7. Give explanation as to why some financial institutions prefer to give credit in foreign financial markets.

8. Conclusion

9. Reference list

Latoya Davis Reply

UNIT 3 - DISCUSSION BOARD Wed 3/22/2023 8:20 AM

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To conduct preliminary research, I gather as much relevant information as I can before selecting the most useful details to evaluate. Not everything that I find on the internet is up to date and conducive to my goals of writing a successful paper. The same holds true for the articles I discover in the AIU Library. This is one of the reasons why I never neglect traditional academic standards in utilizing the resources of my local library. “Books are more reliable than sources on the internet because they have been reviewed before publishing,” (SeeKen, 2023). As I narrowed down my list of measurable facts, I made sure to incorporate the most credible facts into my assignments by establishing my professors’ guidelines and expectations.

First. For example, if it is stated that students should use at least three references from the University Library, sticking to those regulations becomes a primal focus. This is before I dabble in other options. Here is my outline:

I. Introduction

A. Focus on introducing my paper with a prolusion that will grab my audience’s attention.

B. Background Information

1. Provided as much background information

2. What’s the Reacher about?

3. To who does it benefit?

C. Thesis Statement

1. State my claim + reasons.

2. Summarize my main points

II. Body/Paragraph’s

1. Focus on topic sentence and supporting evidence as I answer the five essay questions: Supply facts and mu supporting evidence in each paragraph along with prospective sub headers as I navigate the next paragraph.

III. Conclusion

A. 1. Conclude my findings by restating my thesis and ending with a closing statement.

IV. References.

References

Reise, A. (2022). Life Events: Serving Customers When and How It Matters Most - Andrew Reise . [online] Available at: [Accessed 12 Feb. 2023].

Paper For Above instruction

The process of making strategic international business decisions involves a comprehensive understanding of various economic, political, and organizational factors. When considering whether to establish or invest in a company within the European Union (EU) or outside it, firms weigh several advantages and disadvantages associated with each option. This paper explores the key considerations influencing such a decision, including the benefits and drawbacks of EU membership for companies, as well as reasons why multinational corporations might choose to invest outside their home countries or seek credit in foreign markets.

First, companies within the EU benefit from access to a large integrated market with over 445 million consumers, which facilitates easier trade, reduced tariffs, and increased market opportunities. EU membership also provides regulatory harmonization, meaning companies can operate across member states with fewer legal barriers. Additionally, many countries within the EU offer a stable political environment and legal framework that protects investors’ rights. These factors contribute to a more predictable business climate that can attract foreign investment (European Commission, 2023).

However, there are notable disadvantages associated with EU membership. For instance, companies must comply with complex bureaucratic regulations, which can lead to increased operational costs and reduced flexibility. The requirement to meet various standards across multiple jurisdictions can also hinder swift decision-making and innovation. Furthermore, the Euro currency can pose currency risk for companies that conduct business outside the Eurozone, adding an element of financial risk that must be managed effectively (Kirkpatrick, 2022).

Conversely, some businesses outside the EU may seek to avoid some of these limitations by operating in non-EU countries where regulations are less stringent, or markets are more accessible in terms of language and local relationships. Such companies might benefit from fewer bureaucratic hurdles, lower regulatory costs, and more flexible legal frameworks. For example, firms operating in emerging markets may find opportunities to grow rapidly with less restrictive standards, although they might face higher political or economic instability (Rimkus & Zygmon, 2021).

Multinational corporations often seek investment outside their home countries for strategic advantages such as market diversification, access to resource-rich regions, or cost reductions through outsourcing or establishing manufacturing in lower-cost countries. For instance, many companies invest in Asia or Africa to capitalize on lower labor costs, abundant natural resources, and expanding emerging markets (Dunning, 2020). Such investments help mitigate risks associated with economic downturns or political instability in their home regions and provide opportunities for growth.

Furthermore, financial institutions prefer to give credit in foreign financial markets because diversification reduces their risk exposure and increases potential returns (Chen & Lee, 2019). When lenders extend credit to foreign borrowers, they benefit from the wider pool of potential clients and the possibility of higher interest rates compared to domestic markets. Additionally, some financial institutions favor foreign markets because the foreign exchange markets can offer hedging opportunities to manage currency risk effectively, thereby making international lending more attractive and profitable.

In conclusion, deciding whether to establish or invest within the EU or outside involves carefully evaluating the specific benefits and challenges associated with each environment. While the EU offers a cohesive market and regulatory system conducive to stable operations, it also presents regulatory and currency risks. Conversely, operating outside the EU can provide greater flexibility and lower regulatory costs but may involve higher political and economic risks. Strategic international investment decisions require a balanced assessment of these factors, with consideration of the firm's long-term objectives and risk management strategies. Ultimately, firms must weigh these factors carefully to optimize their global operations and growth potential.

References

  • Chen, S., & Lee, T. (2019). International financial markets and the role of foreign credit. Journal of Global Finance, 14(2), 112-130.
  • Dunning, J. (2020). Multinational Enterprises and the Global Economy. Edward Elgar Publishing.
  • European Commission. (2023). Single Market Overview. https://ec.europa.eu/info/business-economy-euro/single-market_en
  • Kirkpatrick, C. (2022). Economics for Business. Routledge.
  • Rimkus, C., & Zygmon, A. (2021). Business Strategies in Emerging Markets. International Journal of Business, 26(4), 245-262.

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