Advantages And Disadvantages Of A Multinational Corporation Finance Essay

Advantages And Disadvantages Of A Multinational Corporation Finance Essay The entities which are operating in more than one country are called Multinational Corporations. The typical Multinational Corporation functions with a headquarter in one country while other facilities are based in other countries. Multinational Corporation is also referred to transnational corporation. The model of the Multinational Corporation may vary but its simplest form is one that is headquarter in one country and its working units in other countries. Its main reason is that companies take advantage of reducing cost for the production of goods and also for the services. Its another form is that all main functions are performed in the origin country of parent company and subsidiaries are less function independently. The start of such kind of business is traced is very old near about 17th century but in the 21st century. Multinational Corporation also comes in existence due to merger of different companies in different countries. Advantages of Multinational Corporation: There are many different reasons why a company practices as a Multinational Corporation. These reasons are given below: Multinational companies can avoid or reduce their transportation cost. Economies of scale also can be achieved. Multinational companies have less chance of bankruptcy than small or non-multinational companies. Research and development process is also more in practice. Wage level in different countries is different, which is a major advantage. Due to globalization, different markets are available. Currency Fluctuations: Currency fluctuation is referred to the changes of a relative value in one currency when compared to other country. The process of currency fluctuation is occurring every day which brings changes in rate of exchange of different currencies of different countries. It is the currency fluctuation which attracts is investors to invest in different currencies for gaining the profit. There are upward or downward movement in the currencies that refers to appreciate or depreciate of currencies. If an investor invests in a currency if that currency depreciates in accordance to investors own currency then there is a profit while if that currency appreciates in accordance of the investors own currency then there is a loss. Political issues may cause the currency fluctuation. If there are political issues of currency fluctuation there will be short term impact also it may be long term. What is FOREX (Foreign Exchange)? Foreign exchange is trading of one type of currency for another. Foreign exchange has no physical location and no central exchange like other financial markets. It operates through a global network of banks, corporations and individuals trading one currency for another. The foreign exchange market is the worlds largest financial market which works 24 hours in a day which trades a huge amount of currencies of different countries. Not like any other financial market, investors can counter to currency fluctuations caused by economic, political and social events at the time when they occur, without having to wait for exchanges to open. The currency markets are not new that they have been around for as long as banks have been established for the dealing and transactions of money. What is relatively new is the openness of these markets to the individual investor, mainly the small- to medium-sized trader. A Short History of the Foreign Exchange Trading Market: Foreign exchange markets mainly established to make easy cross border trade in which there is involvement of different currencies by governments, companies and individual investors. More ever these markets generally existed to supply for the international movement of capital and money, even the initial markets had speculators. Today, a great part of Foreign Exchange market working is being determined by assumption, arbitrage and professional dealing, in which currencies are traded like any other commodity. The Retail Investors only means of gaining contact to the foreign exchange market was through banks that transacted in a huge amount of currencies for commercial and speculation purposes. After exchange rates were allowed to float freely in 1971, the volume of trade has been increased over the time. Most of the worlds major currencies were pegged to the US dollar due to an agreement that is called the Britton Woods Agreement. The participating countries try to maintain the value of their currencies against US Dollar also with the rate of the gold. These countries are bounded to devalue their currencies for the purpose of gaining advantage. Types of markets and transactions: There are two types of markets or transaction which are very common. Spot market / spot transaction Forward market / forward transactions In spot transactions, buying and selling certain amount of foreign currency are based on current market rate and settlement are made and paid for without more ado. On the other hand, Forward transactions, are deals arranged for future settlement, to be paid for on decided dates on or after delivery. Characteristics of Foreign Exchange Market: There are some characteristics of Foreign Exchange Markets such as: Volume of trading is very huge. By the use of technologies like internet the foreign exchange trading centers are linked together to get updated information and for the trading. Due to the integration of trading centers there is no significant arbitrage. Functions of Foreign Exchange Markets: What kind of functions of Foreign Exchange Market performs are give below: Transfer of purchasing power. Financing of inventory in transit. Hedging. Conversion of currencies. Reducing of foreign exchange risks. Participants of the Foreign Exchange Market: There are the participants of the Foreign Exchange Markets those participates in dealing and transactions. Banks Foreign Exchange Dealers. Individuals Firms. Speculators Arbitrageurs. Central Banks Treasuries. Foreign Exchange Brokers. Foreign Exchange Transactions Advantages: The advantages of the foreign exchange transactions are such as: Commission Free Transaction Direct Transactions Round the Clock Market Leverage (huge investment refers to huge profit) Highly Liquid Free online information Foreign Exchange Transactions Disadvantages: There are some disadvantages of foreign exchange transactions such as: Leverage (huge investment refers to great loss) Brokers (inexperienced, unfaithful) Spreads (broker generally quote a fixed spread) Role of Foreign Exchange Markets in the Global Market Place: Exchange rate Foreign currency denominated financial instrument Exchange rate is referred to that how much units of one currency are required to purchase the one unit of other currency and foreign exchange denominated financial instrument is referred to bond, stock or a bank deposit whose value is denominated in the currency of another country. When you carry out business in a foreign country, you will have to exchange currencies involved at some existing exchange rate. The price of one countrys currency in terms of another country is called the exchange rate. When the currency of one country drops in value there will be an equivalent appreciation of value in another countrys currency. Depreciation (devalue of currency) occurs when it takes more currency to purchase the currency of another country. Appreciation (increase in value of currency) is just the opposite; the currency is able to purchase more units of the other countrys currency. Since most currencies are esteemed according to the market, usually there are constant changes to exchange ra tes. Foreign Exchange Risks: Foreign exchange risk is usually defined as Multinational Corporation faces variability in their currency values of assets, liabilities and operating income due to the unexpected currency fluctuation. That variability can be reduce or eliminate partially or fully. Classification of Exposures: There we can classify the Foreign Exchange Exposures in three types such as: Transaction exposures Translation exposures Economic exposures All these exposures severally affect the outcome of the business. How these exposures affect a business now we see individually all these exposures. Transaction Exposure: Transaction risk occur when any company makes trade, borrows, lend and sell the fixed assets of its subsidiaries company; all these operations takes lot of time so during that time when times come for the payment then there is real change of exchange rate so it refers to the Transaction Exposure. Let see an example, a Pakistani importer make a deal for the some kind of commodity with United States suppliers after the delivery when time comes for payment if the importer pays in local currency (PKR) then the United States supplies is at risk, if the payment is in foreign currency (USD) then the importer is at risk. Usually in this case exporter is at risk of exchange rate risk because supplier quotes the price in buyers currency. Translation Exposure: Translation risk have to face when a parent company making its financial statements in its local currency. Because when consolidating the earnings, liabilities and assets of the subsidiaries company to the local currency then the exchange rate has changed, due to this exchange rate change the value of that asset when acquired has changed same to liability and earnings. Financial statements have to make in a single local currency for the stakeholders. Subsidiaries companies value (assets, liabilities, earnings) is shown in financial statements in local currencies at current exchange rate. Translation exposure depends upon the translation method. There are two common methods are used for the translation such as: Current / non-current method Monetary / non-monetary method In current / non-current method current assets and liabilities are translated at current rate (closing rate at the time of making balance sheet), while non-current assets and liabilities are translated at the historical rates (the rate when asset was acquired and the liability incurred). According to this method only current assets and liabilities are exposed to currency fluctuation. In monetary / non-monetary method the monetary assets and liabilities are translated at the current rate while the non-monetary assets an liabilities are translated at the historical rate. In this method monetary assets and liabilities are exposed to currency fluctuation. Economic Exposure: The change in the present value of a company due to change in future cash flows which caused by the fluctuation of the exchange rates. Cash flows can be classified in to two types like cash flows due to contractual commitment and the cash flows due to anticipated future transactions. Every transaction exposure is included in the economic exposure. Let see an example, when the cost of a Multinational Company incurs in one currency and its sales generated in other currency so, the competitive advantage of the Multinational Company is affected by the change in exchange rate. Simply profit of the Multinational Company can decrease if the cost currency appreciates and

The Low-Wage Worker wanting the American Dream

What she truly experienced was someone stepping out of her comfort zone into a life that she was not born onto. Again, though, her main idea was to find a job and be able to survive income for expenses. In reality, those working in a low-wage job are just trying to survive, and hoping by the end of the day they have broke even, even though most don't. In Winter Coat, Terrier Griffith, tells the story of what its like growing up poor and wanting to be different. Griffith states that â€Å"the thing about being poor is that you know what it means to be poor – and there's always someone poorer than you. (Tea 61 ) Griffith talks about what it was like wearing hand me downs, being in the free lunch program, and other classifications,' like standing in the free lunch line, that sometime embarrassed her. Her mother wanted her to have a future different than the one she was raising Griffith in. Because of the pressure from her mom, she realizes that â€Å"without the protection econ omic stability provides, this is no room for failure. She had no room to fail. † (Tea 64) She was raised to take the ‘safe road. Griffith talks about the class of people, especially by what they are wearing, and explains that by comparing the different coats people wear on the train that she rides. She realizes that many people continually deal tit wanting the American Dream everyday. â€Å"What about the American Dream, the theory that with hard work and perseverance people can transcend in the class in to which they are born? Want to believe in it, but I don't. Class is about more than money; its about safety and security, knowing that what you have today, you will have tomorrow.It's about having faith and feeling safe in the knowledge that when my coat gets worn out, there will be other coats. † (Tea 65) No matter what class people are in, I believe everyone is trying to live out their definition of the American Dream. The cost for this hope can be life hanging . In The Just-Add-Water Kennedy's and Barbecue Bread Violence, Polyester, starts off her story focusing on the American Dream. Polyester states, â€Å"Fewer than one percent of Americans break out of the class they are born into. † (Tea 67) She goes on to tell about her parents and their dream of class jumping, and how they devote their lives to it.To her parents, the working class neighborhood, where they lived, was only temporary. Her parents wanted better. Even her grandparents wanted better. It was embedded into each generation that you could move higher up in class, with just the right job, the right education, and the right privileges. Her family struggled with this for years. The only purpose of the â€Å"children† was to become rich. When her father landed a job that provided more money, her parents felt that they had fulfilled their dream, the American Dream. Polyester states: â€Å"Their dream for us hadn't died.Higher education, to my parents, was still a w ay for their children to jump class†¦ No matter how hard they tried to turn us into just-add-water Kennedy's, all fifths posturing failed, and so did college. The bottom line was that were lower class, and there was no way we could be any different. (Tea 73) Though the stories are different, the results are the same. Just as Polyester states, very few Americans break out of the class they are born into, though many want to believe its possible. In Rehearing's journey, she tries to become lower class, but does not succeed.She sets rules and limits, whereas, most lower class don't have rules or limits, only their basic need is to survive. The lower class tries to make it to make it to the next month, with the hope that tomorrow they won't need as much. Their dream is that their children will do better than they did, with the hopes that one day, just maybe class can be jumped, if not by them, then maybe their children. When it comes to the relationships of the lower class, look at the relationship Polyester had with her parents. Her parents tried and pushed hard to come out of the class they were in.They tried to fit in, to be different. It was embedded into them by their parents, that they were not worth anything unless they succeeded. This was their reward. Her parents pushed, both them selves and their children. When her father failed, he ‘couldn't deal with the shame' and later committed suicide, only apologizing to his parents for failing. To him, to succeed was to be rich; to fail was to be poor. After his death, her family went their separate ways. Polyester's family was only ‘together' to become rich, to jump a class. But when life showed them that they couldn't they didn't stay together.I don't think it matters which class you are, if your family falls apart, it was together for the wrong reasons. I look at my own family situation when I read all three of these stories. Grew up in a lower class family. Both parents had to work to make en ds meet. We were not the poorest of the poor, but there were times where we had to rely on the DOD pantry to eat or sign up for help at Christmas just to get presents. L, in no means, thought I would ever stay there. My parents never pushed me to be better then they were, but believe they wanted more for my siblings and me. My parents divorced when I was young and both remarried.I lived with my mom and step dad, where money was tight and I wore hand me downs from my cousin. My dad and his wife had a different life. Though both worked, their kids always had new clothes, and the latest video games. They had a new house, where mine flooded every time it rained. I was on the border of lower and middle class. I went on to Bible College, where I pursued a dream of working in children's ministry. To my father, it was a waste of my time, as I would make no money from it. When was done, I found myself working in a call center, at a low wage job, making just enough to make ends meet.After I w as married I became a nanny, barely making minimum Wage and having to pay my own taxes. Now we had one child. My husband and I struggled for years, as he was laid off from his job and then tried to start his own business. There were many health issues that got ignored because we didn't have health insurance. I tried selling Mary Kay Cosmetics, buying into he notion that ‘I could be rich like her' if followed the dream Mary Kay laid out for us. The ‘dream' ended as a business loss, and costing us more, than I had put into it at the beginning.Reading all three of these accounts had me relating to many of the situations the authors found them selves in. Griffith accounts of being poor and wanting to be different, reminded me of when I was younger and use to tell stories of my parents being a pilot or working for the government, just so I could fit in. Though the story wasn't true, the desire to fit it was deep rooted, and to this day I even find myself wanting to dress icie r, and even more up-class, just so the world won't know I am still lower class. Who is to know that my clothes came from goodwill or a garage sale?Polyester's parents remind me of my own father, who believes that a stay-at- home mom doesn't amount to much, and that a college degree really shows what you are worth. My father wasn't the extreme like Polyester's father, but am continually asked about how much I make, or when I will graduate. I have been promised many things, as long as I finish my degree, because to him, that is all that matters. As for Rehiring, the people she worked with in err low-wage jobs remind me of myself sometimes, I still don't think she could ever truly feel the true emotions of what it is like to be in a low class family.Struggling to make ends meet. Would love to switch places with her and see if she could handle the stress that seems to follow when you are a low-class working family. I have dreamed of living the American Dream. To own a home, have good sc hools for my children to attend, to not worry about how much I spend at the grocery store, or even be concerned when or if the bills will get paid. Want a life where health insurance isn't an issue, and I'm not living paycheck to paycheck. I have to believe its possible to obtain it, to have hope.

History of the Victorian Scullery

A scullery is a room adjoining the kitchen where pots and pans are cleaned and stored. Sometimes the laundering of clothes is also done here. In Great Britain and the United States, houses built before 1920 often had sculleries located in the rear of a house. Scullery comes from the Latin word scutella, meaning tray or platter. Wealthy families who entertained would have to maintain stacks of china and sterling silver would need regular cleaning. The process of cleaning everything in a household was time-consuming—the number of staff required was proportional to the number in the household. Who took care of the household staff? The most menial tasks were carried out by the unskilled, youngest servants known as scullery maids or simply  scullions. These domestic servants were almost always female in the 1800s and were sometimes called skivvies, which is also a word used to describe underwear. Scullery maids did the most humble tasks in the household, including laundering the underwear of the upper servants like butlers, housekeepers, and cooks. Functionally, the scullery maid was a servant to the other servants of the household. On the PBS website for the Manor House television series,  The Scullery Maid: Daily Duties are outlined for the fictional Ellen Beard. The setting is Edwardian England, which is during the reign of King Edward VII from 1901 to 1910, but the duties are similar to earlier times—rising early to prepare for the household staff, lighting the fire of the kitchen stove, emptying chamber pots, etc. As the household upgraded technologically, these tasks became less of a burden. Sculleries and the servants who work in them are often featured in popular movies and television series, such as Upstairs Downstairs, The Duchess of Duke Street, and Downton Abbey. The home featured in the popular TV series, The 1900 House, has a scullery in the rear, behind the kitchen. Why Are Sculleries Thought of as British? For people living in the 21st century, its sometimes difficult to think of the day-to-day existence of people living in the not-too-distant past. Although civilizations have known about disease for thousands of years, its only been in recent years that people have understood the causes and transmission of sickness. The Romans built great public bathhouses that still influence todays architecture. Medieval households would cover nasty smells with perfumes and herbs. Not until the reign of Queen Victoria,  from 1837 until 1901, did the idea of modern public health come about.   Sanitation became a big concern in the 19th-century as the medical community gained a better knowledge of how to control infections. The British physician Dr. John Snow (1813-1858) became legendary in 1854 when he surmised that removing a towns pump handle would stop the transmission of the cholera epidemic. This use of the scientific method to deter the spread of disease made Dr. Snow the Father of Public Health, even though the bacteria Vibrio cholerae was not isolated until 1883. The awareness of cleanliness to avert disease was certainly not lost on the members of the upper class. The houses we build are not built in isolation from what is going on in society. The architecture built at the time of Queen Victoria—Victorian architecture—would be designed around the latest science and technology of the day. In the 1800s, having a room devoted to cleaning, the scullery, was high-tech thinking. Franke, a Swiss company formed in 1911, made their first sink in 1925 and still sell what they call scullery sinks. The Franke Scullery Sinks are large, deep, metal sinks of various configurations (1, 2, 3 sinks across). We might call them pot or prep sinks in a restaurant and shop or utility sinks in a basement. Nevertheless, many companies still call these sinks after the 19th-century name of a room. You can even buy these sinks from various manufacturers on Amazon.com. Significance of the Scullery to the US Homeowner People in the market for buying older homes are often puzzled at floor plans and how space is allocated—what are all those smaller rooms to the rear of the house? For old houses, remember: Kitchens were often additions, separated from the main house because of fire hazards.What we know as the middle class did not become a reality until the mid-twentieth century. What we consider  an old house today was probably built and inhabited by a financially well-off family with servants. Understanding the past helps us take charge of the future. Sources 150th Anniversary of John Snow and the Pump Handle, MMWR Weekly, September 3, 2004 / 53(34); 783 at www.cdc.gov/mmwr/preview/mmwrhtml/mm5334a1.htm [accessed January 16, 2017]

How to Use the Internet as a Reporting Tool

At the risk of sounding like an old fogey, let me explain what it was like to be a reporter in the days before googling was a verb. Back then, reporters were expected to find their own sources and interview them, either in person or over the phone (remember, before the internet, we didnt even have email). And if you needed background material for a story, you checked the newspapers morgue, where clips from past issues were kept in filing cabinets. Or you consulted things like encyclopedias. Nowadays, of course, thats all ancient history. With the click of a mouse or a tap on a smartphone, journalists have access to virtually unlimited amounts of information online. But the strange thing is that many of the aspiring reporters I see in my journalism classes dont seem to know how to appropriately use the internet as a reporting tool. Here are three main problems I see: Relying Too Heavily on Material From the Web This is probably the most common Internet-related reporting problem I see. I require students in my journalism courses to produce articles that are at least 500 words, and every semester a few submit stories that simply rehash information from a variety of websites. But there are at least two problems that arise from this. First, youre not doing any of your own original reporting, so youre not getting important training in conducting interviews. Second, you run the risk of committing plagiarism, the cardinal sin in journalism. Information taken from the internet should be a complement to, but not a substitute for, your own original reporting. Any time a student journalist puts his byline on an article being submitted to his professor or the student newspaper, the assumption is that the story is based mostly on his own work. By turning in something thats largely copied off the internet or not attributed properly, you are cheating yourself out of important lessons and running the risk of getting an F for plagiarism. Using the Internet Too Little Then there are students who have the opposite problem — they fail to use the internet when it could provide useful background information for their stories. Lets say a student reporter is doing an article about how rising gas prices are affecting commuters at her college. She interviews plenty of students, getting lots of anecdotal information about how the price rise impacts them. But a story like this also cries out for context and background information. For instance, what is happening in global oil markets that are causing the price increase? What is the average price of gas across the country, or in your state? Thats the kind of information that can easily be found online and would be perfectly appropriate to use. Its laudable that this reporter is relying mostly on her own interviews, but shes short-changing herself by ignoring information from the web that could make her article more well-rounded. Failing to Properly Attribute Information Taken From the Web Whether you are using online sources a lot or just a little, its crucial you always properly attribute the information you use from any website. Any data, statistics, background information or quotes that you havent gathered yourself must be credited to the website it came from. Fortunately, theres nothing complicated about proper attribution. For instance, if you are using some information taken from The New York Times, simply write something like, according to The New York Times, or The New York Times reported†¦ This introduces another issue: Which websites are reliable enough for a reporter to use, and which sites should she steer clear of? Fortunately, Ive written an article on that very topic, which you can find here. The moral of this story? The bulk of any article you do should be based on your own reporting and interviewing. But any time you are doing a story that could be improved with background information on the web, then, by all means, use such information. Just make sure to properly attribute it.