FINC20023 International Financial Management Report Sample

Assignment Brief  

Questions to Answer:

Based on the case studies and any other research/resources/similar case studies, please answer the following in the form of a report:

Q1. What are the factors that can influence successful globalisation of a business? What steps should a business consider for preventing failures in globalisation? Explain.

Q2. What are the financial management issues including investment and financing decisions that a business needs to consider when planning globalisation or operating globally? Explain.

Structure of the report:

Executive Summary 

Brief Introduction 

Question 1 
Question 2 

Conclusion 

Referencing, diagrams, tables and spread sheets, word limit (i.e., Overall Report)

Report

The report can be presented either individually or as a group of a maximum of 3 students. Only 1 student of the group needs to submit the report. It is ok to form group across campus and study modes.

The introduction should provide a general overview of the report and its structure and the scope and the issues covered. The conclusion should highlight what has been discussed in the report and the overall findings and any implications of these findings. The executive summary should provide an overall snapshot of the whole report - what was discussed, what questions were addressed, what were the findings, what can be the implications etc. The other sections (i.e., answer to the questions) can be presented with appropriate headings and sub-headings.

Notably, financial management in an organisation can include 3 main aspects:

- Investment decision: which relates to invest decisions by organisations?

- Financing decision: which corresponds to raising money by the organisation to operate?

- Working capital management: which corresponds to managing raised capital day-to- day and include various aspects like inventory management, management of sales or purchase on credit etc?

You may consider referring to these various aspects when discussing financial management issues.

Solution 

1. Introduction

This report provides information related to various factors which an organisation adopts to get success in the global market. Business globalisation refers to business expansion by removing trade national and international barriers. It will enable integration, interconnectivity and interdependence of the capital market and production process. Their report also provides inflammation related to the factors which cause in failure of business in case of globalisation. This report provides information related to management issues, including the financial decision and investment decisions that organisations consider during planning for globalisation. Organisations are required to consider financial control and planning. If the organisation wants to control their finance, then the organisation need to establish a standard, such as a budget. Budget help to compare actual income and expenditure. Organisations need to plan properly to allocate funds. It has the alternative usage of fund allocation. It is because fund allocation is the most significant part of globalisation.   

2. Factors Influencing Successful Globalisation of a Business 

2.1 Factors

Business globalisation refers to business expansion by removing trade national and international barriers. It will enable integration, interconnectivity and interdependence of the capital market and production process. Also, enable the flow of resources, service and goods between two different nation. Therefore, organisations expand business through economic growth and international trade in the marketplace. There are several factors which influence business in the global markets (Potter & Housego, 2020).

Transportation

Organisations can reduce shipping costs through containerisation. Organisations can deliver the bulk of their products efficiently. If the organisation adopted faster and cheaper transportation systems, then the organisation could build manufacturing facilities across the globe. But the organisations have to maintain frequent deliveries, finished products and schedules. CSL Limited collect plasma from more than 230 centres across Europe and US to develop more medicine (Khadem, 2018). Therefore, it helps the CSL to make them the most efficient and world's largest human plasma collector. This brings global success in the global market MBA assignment expert.   

Merger 

Merger and acquisition are one of the processes where business organisations reduce competition from the market. Organisations purchase small industries in the market and use their resources for production purposes. CSL acquire ZLB, a network of plasma collection centres and laboratories and Aventis Behring in the 2000 and 2004 period. This helped to build the business of powerhouse plasma therapies. At present, it is called CSL Behring. Also, the company manage their capital in the different segments and repurchases its share from the existing market when it determines that there is nothing to do. Also, the company well manage their assets and liabilities (Potter & Housego, 2020).       

Innovation

An organisation globally compete by bringing product innovation. CSL is the world leading manufacturer of life-saving therapies. These therapies helped to treat haemophilia and debilitating immunodeficiency diseases. Not only that, CSL develops vaccines and sera for tetanus, diphtheria, typhoid and cholera diseases.  

R&D

The research and development scales of CSL were unusual. The new research and development help CSL to boost their profit and sales from other Australian companies. The company’s cell-based influenza vaccines replace traditional egg-based vaccines. CSL112 develop for the treatment of secondary heart attacks and develop therapies to prevent transplant rejection (Khadem, 2018). For the treatment of anaemia, develop new gen-based therapy. This gen-based therapy is developed for African Americans people.            

2.2 Steps to Prevent Failure in Globalisation 

An organisation faces different challenges during the expansion of its business in the global market. Such as lack of resources, lack of the adoption of different cultures and product innovation etc. An organisation can mitigate these problems through the following ways.

Diverse Workforce

An organisation has to create an inclusive and diversified workforce which helps the organisation to mirror its customers. An organisation need to provide training to their employees and required to develop staff skills, knowledge and resilience so that they can serve their customer better. Also, create a learning working environment to provide flexible working support (Hunt et al. 2018). Walmarts success in the global markets provides better service to their customers by learning different countries' cultures and producing products as per their requirements. The company analysis the shopping habits of customers in each country. 

Effective Supply Chain

An organisation can reduce errors by creating an effective supply chain. An organisation can prevent globalisation failure through proper management of inventory and logistics. An organisation could not be succeeded in the global market if it did not manage its inventories and logistics. Also, organisations require visibility in the supply chain at all times to gain success in the global markets (Academic.oup.com, n.d.).   

Technology

Globalisation and technology are interrelated. Without the adaptation of technology, organisations can not compete in the global market. The market will be limited if an organisation do not adopt the technology. An organisation can not sell their product and communicate team in real time without digital platforms and tools. Walmart fails to adopt technology to expand its business in the global market (Hunt et al. 2018). Not only that, Walmart close their 269 retail stores globally. It is because consumer purchasing behaviours changed toward online e-commerce services. Also, Walmart’s online retail technology was not a homogenous global experience. After analysing the market, Walmart suggests that increasing demand for online retail slows down the mortar and brick international expansion (Academic.oup.com, n.d.).    

3. Investment and Financial Decision Issues (Financial Management Issues)

In the case of business globalisation, organisations have to consider different financial and investment decisions to operate in the global market successfully. 
Financial control and planning

Organisations are required to consider financial control and planning. If the organisation wants to control their finance, then the organisation need to establish a standard, such as a budget. Budget help to compare actual income and expenditure. It is because international expansion is more expensive that rather than the expansion of business in the domestic market. Budget preparation is the planning function of the financial manager. But the administrator is required to control these functions. Without controlling these functions, organisations not efficiently work in the global market (Gorynia, 2019). International accounting and foreign exchange are the key factors for MNCs when they attempt to perform their control and plan function. For example, when an organisation expand their business in the global market, then the return on investment does not only depend on the trade gain or loss but also depend on the exchange gain or losses of foreign currency fluctuations. MNCs want to control its operation then they have to work in the case of international reporting and controlling technically. In the case of financial planning and controlling processes, organisations require to analyse information so that they can prepare plans (Shahbaz et al. 2018). Organisations are required to design an investment strategy and properly implement this strategy. Organisations are required to monitor this strategy continues to determine whether these strategies are working for the organisation or whether the strategy requires further improvement (Gorynia, 2019). Therefore effective management is the cornerstone of meaningful financial reporting. Hence organisations require to gather all the financial information because accurate financial data are important for global business. 

Fund Allocations

Organisations need to plan properly to allocate funds. It has the alternative usage of fund allocation. It is because fund allocation is the most significant part of globalisation. Every successful globalised business pays attention to the allocation of funds more than its sales figure. Organisations need to allocate funds to their assets in such a way that it will increase the wealth of the organisation's stakeholders (Zajda, 2021). Organisations are required to invest in their manpower. It is because the organisation does not only means selling services and product. Organisations need to consider those people creating the deliverable, and providing service to their customers on behalf of the organisation is also important (Shahbaz et al. 2018). Therefore, a part of the funding is required to invest in manpower. Organisations have to incur expenses in wages and employee training. These wages are the compensation for the service that employees provide in the organisation. The organisation should provide these wages as per industry standards. Worldwide there are 200 countries' organisations, such as Walmart, that are succeeding in the global market by properly allocating their funds. Therefore, organisations get more investment opportunities in the global market rather than the global market (Barnes & Adam, 2018). Also, there are certain risks, such as different levels of liquidity risk, changes in market value, and legal remedies. Organisations need to consider these two factors simultaneously to maximise firm value through international investment.                  

Fund Acquisition

Organisations need to acquire funds on the favourable term. If an organisation finds due to globalisation, cash outflow is more than the cash inflow, then the organisation have to acquire fund from outside the organisation. The organisation can acquire funds by issuing irredeemable debentures or taking a loan from a financial institution. Also, organisations can acquire funds from many sources at varying costs, such as different investment maturities and different types of agreements (Barnes & Adam, 2018). Therefore organisations need to determine financing combination which suits the planning need of the organisation. Organisations need to acquire funds where the optimal balance between risk and low cost and organisations are able to pay obligations when they become due. If the organisation faces difficulties acquisition of funds from different outside source organisation could use liquid assets to collect funds for the business. Organisations provide discounts to their debtors to collect funds quickly to remain business operations continuously (Zajda, 2021). Therefore, organisations can get more investment opportunities in the global market rather than in the global market. Also, there are certain risks, such as different levels of liquidity risk, changes in market value, and legal remedies. Organisations must consider these two factors simultaneously to maximise firm value through international investment. The organisation attracts investors by showing business growth. Organisations need to provide a healthy return to their shareholders so that organisations can attract more international investors (Shahbaz et al. 2018).          

4. Conclusion

This report discusses various factors which an organisation adopts to get success in the global market. Business globalisation refers to business expansion by removing trade national and international barriers. It will enable integration, interconnectivity and interdependence of the capital market and production process. Their report also discusses the factors which cause in failure of business in the case of globalisation. In this report, organisations considered management issues, including the financial decision and investment decisions that organisations consider during planning for globalisation. Organisations are required to consider financial control and planning. Without controlling these functions, organisations not efficiently work in the global market. International accounting and foreign exchange are the key factors for MNCs when they attempt to perform their control and plan function. Organisations are required to invest in their manpower. It is because the organisation does not only means selling services and product. Therefore, organisations get more investment opportunities in the global market rather than the global market. Also, there are certain risks, such as different levels of liquidity risk, changes in market value, and legal remedies. Organisations must consider these two factors simultaneously to maximise firm value through international investment. The organisation attracts investors by showing business growth. Organisations need to provide a healthy return to their shareholders so that organisations can attract more international investors.    

References 

Academic.oup.com (n.d.). Retrieved November 24, 2022, from https://academic.oup.com/joeg/article-abstract/7/4/451/889310?redirectedFrom=fulltext 

Barnes, E., & Adam, C. (2018). The importance of human resources in a globalised economy: A conceptual framework. Canadian Journal of Applied Science and Technology, 5(2). http://ojs.onlinejournal.org.uk/index.php/cajast/article/download/139/142 

Gorynia, M. (2019). Competition and globalisation in economic sciences. Selected aspects. Economics and Business Review, 5(3). https://yadda.icm.edu.pl/yadda/element/bwmeta1.element.desklight-ba04b749-3803-428d-a92b-c5d45731f0f0/c/10677_Volume5_Issue3_08_paper.pdf.pdf 

Hunt, I., Watts, A., & Bryant, S. (2018, April 16). Walmart's international expansion: Successes and miscalculations. Retrieved November 24, 2022, from https://www.emerald.com/insight/content/doi/10.1108/JBS-02-2017-0013/full/html 

Khadem, N. (2018, June 01). 'Beautiful blood': How csl became a global success story. Retrieved November 24, 2022, from https://www.smh.com.au/business/markets/beautiful-blood-how-csl-became-a-global-success-story-20180601-p4zis1.html 

Potter, B., & Housego, L. (2020, February 21). The four secrets to CSL's success. Retrieved November 24, 2022, from https://www.afr.com/companies/healthcare-and-fitness/the-four-secrets-to-csl-s-success-20200221-p54312 

Shahbaz, M., Shahzad, S. J. H., Alam, S., & Apergis, N. (2018). Globalisation, economic growth and energy consumption in the BRICS region: The importance of asymmetries. The Journal of International Trade & Economic Development, 27(8), 985-1009. https://mpra.ub.uni-muenchen.de/86979/1/MPRA_paper_86979.pdf 

Zajda, J. (Ed.). (2021). Third International Handbook of Globalisation, Education and Policy Research (Vol. 1). Springer. https://research.rug.nl/files/182987436/antoon_de_baets_academic_freedom_between_history_and_human_rights_2021_.pdf