Finance Issues of MNCs

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Finance Issues of MNCs

In the project I will address about finance issues of major multinational companies. Companies in today’s world operate in global stage marketplace, and sometimes they can disregard the fact that they are only at their peril. Multinational finance and commerce has given advancements in transportation, communication and technology. Hence this development has given us a dramatic reality that global market should be standardization of the consumer and industrial product on previously unimagined scale.

In my project I will take into account how multinational companies work. I will primarily through light on the issue of how these companies manage the finance. I will assess the various countries in comparing to UAE in finance dealings of big multinational companies. In later part of my project I will conduct a survey related to multinational finance in UAE, and then discuss the outcomes of the survey. Multinational finance is major topic and I will try to describe its significance to UAE.

Multinational Corporation (MNC) is a company which is engaged in production and selling of services or goods in more than one country. In generally it consists of a parent company which is at home country and it has at least five or more foreign subsidiaries, typically having high degree of strategic communication in between the units. MNC sometime have more than hundred foreign subsidiaries, one such company United Nations estimate at least 35000 companies around the world. General Electric Company has taken advantage of globalization and it focuses on global reach to have less expensive material and intellectual capital in foreign countries (Shapiro, 2006).

Internationalization of American economy is very surprising and analysts believe that 60% of USA companies’ revenues come from foreign market in 1997. The investment of USA companies in foreign companies is 100’s of billions of dollar each other. The stock of foreign direct investment by USA companies reached 2.07trillion in 2003 (Shapiro, 2006).

Defining MNC’s Finance

Despite the underline reason of global expansion, the true MNC is characterized more by state of mind rather than size or world wide diffusion of its assets. Rather than to confine to its domestic plant site the MNC ask, where in the world should we build the plant?