EECS 1019 Lecture 8: EECS 1019 Lecture 8 Notes
15 Jun 2018
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EECS 1019 Lecture 8 Notes
Introduction
How Business Disciplines Are Used to Manage the MNC
• The focus of this text is on MNCs whose parents wholly own any foreign subsidiaries,
which means that the U.S. parent is the sole owner of the subsidiaries.
• This is the most common form of ownership of U.S.-based MNCs, and it gives financial
aagers throughout the fir the sigle goal of axiizig the etire MNC’s value
(rather than the value of any particular subsidiary).
• The concepts in this text apply generally also to MNCs based in countries other than the
United States.
• Various business disciplines are integrated to manage the MNC in a manner that
maximizes shareholder wealth.
• Management is used to develop strategies that will motivate and guide employees who
work in an MNC and to organize resources so that they can efficiently produce products
or services.
• Marketing is used to increase consumer awareness about the products and to monitor
changes in consumer preferences.
• Accounting and information systems are used to record financial information about
revenue and expenses of the MNC, which can be used to report financial information to
investors and to evaluate the outcomes of various strategies implemented by the MNC.
• Finance is used to make investment and financing decisions for the MNC.
• Common finance decisions
• Whether to discontinue operations in a particular country
• Whether to pursue new business in a particular country
• Whether to expand business in a particular country
• How to finance expansion in a particular country
• These finance decisions for each MNC are partially influenced by the other business
discipline functions.
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