Page 258 - DMGT545_INTERNATIONAL_BUSINESS

Unit 13: Basics of International Accounting and Financial Management

13.2.4 the Global economy notes

Several indicators demonstrate the extent of business globalization:

l z International trade: In 2001 exports worldwide topped $6 trillion. Between 1987 and 1999,
U.S. exporters increased by 233% in number.
l z Foreign Direct Investment: Between 1982 and 1999 worldwide FDI inflows increased from
$58 billion to $865 billion.
Several indicators demonstrate the extent of business globalization:
l z Multinational Enterprises (MNEs): Companies that have headquarters in one country and
operate in one or more other countries. Currently, MNEs account for over one-quarter of
the world’s Gross Domestic Product (GDP).
Several indicators demonstrate the extent of business globalization:

l z International Capital Markets: In 2001 there were 462 companies representing 53 countries
cross-listed on the New York Stock Exchange (NYSE). In addition, over 60 U.S. companies
are cross-listed on foreign exchanges.

self assessment

Fill in the blanks:

10. ................ per se, are considered common equity of the issuing company and are entitled to
dividends and voting rights since the date of their issuance.
11. The ................ effectively transacts with only one entity – the overseas depository – for all
the transactions.
12. The voting rights of the shares are exercised by the depository as per the understanding
between the issuing company and the GDR ................ .
13. ................ refers to setting prices on goods and services exchanged between separate
divisions within the same firm.
14. ................ is a negotiable certificate issued by a depository bank which represents the
beneficial investors in shares issued by a company.
15. The credit rating organisation classifies bond issue into categories based on ................ of the
borrower.

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Case Study mcDonald’s international Hr

ne of the best known companies worldwide is McDonald’s Corporation. The fast
food chain, with its symbol of the golden arches, has spread from the United States
Ointo 91 countries. With over 18,000 restaurants worldwide, McDonald’s serves
33 million people each day. International sales are an important part of McDonald’s
business, and over 50 per cent of the company’s operating income results from sales outside
the United States. To generate these sales, McDonald’s employs over one million people,
and by 2000, McDonald’s had grown to over two million employees.
Operating in so many different countries means McDonald’s has had to adapt its products,
services, and HR practices to legal, political, economic, and cultural factors in each one
Contd...

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