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Foreign Investment Decisions Essay

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Updated: May 28th, 2021

During this course, I am going to develop the Comprehensive Project focused on foreign investment. Needless to say that it will be critical for me to gather a large amount of authoritative information in order to complete these task successfully. That is why I will have to conduct research that reveals information about the selected multinational firm, the way it is affected by globalization, its financial state, and decision-making associated with foreign investment. Then, I will identify the most critical data that can be beneficial for my project and develop the work on its basis, conducting my own analysis.

The first thing I have to do in order to prepare my future project is to conduct research. I will start it with the selection of an organization for discussion. It will definitely be a well-known company. I think that it will be better for me to focus on those firms that are not located in one country only but can be found worldwide. The fact that it already has experience in working with foreign markets will be advantageous. It will prove the competitiveness of the organization and presuppose that it has already obtained some foreign investment in the past. Thus, it will be possible to discuss its previous experience when speaking about future decisions. Being aware of the company’s operations, I will deepen my knowledge in the decision-making process associated with the foreign investment (“What is foreign investment,” 2018). It will be important for me to reveal what actions should be conducted to make a right decision. Of course, everything will be aligned with the selected firm.

My research will be based on literature review because I will look for articles and books that discuss the topic of my interest. All sources will be no older than 5 years. They will be trustworthy and reliable; questionable information will not be used because it can affect the quality of my project adversely (“Evaluate & choose quality sources,” 2018). In addition to that, I am going to find some statistics that reveal the influences of globalization and company’s financial condition. Moreover, it will be advantageous to look for those countries that are more likely to provide investment than others.

In order to identify and present my findings, I will develop a set of questions that my project is going to answer. As a result, my task will be to reveal information so that it discusses all listed points. I will provide a summary of the most important information, supporting it with my own analysis and ideas (“Step 5,” 2018). I will do my best to narrow selected concepts as much as possible. Only in this way, the opportunity to minimalize the amount of unnecessary information will be achieved.

In order to develop the Comprehensive Project on the basis of the obtained information, I will create its outline, focusing on the decision-making associated with the foreign investment. In particular, I believe that my project deliverable will look as follows:

  1. Introduction (description of the topic; identification of the purpose)
  2. Company that seeks investment (selection of the organization that will be looking for foreign investment)
  3. Reasons for multinational corporations to invest in foreigners (influences of globalization on foreign investment; advantages and disadvantages for both parties)
  4. Company that provides investment (description of the organization(s) that is likely to provide required investment)
  5. Inside and outside market (advantages and disadvantages faced by the investor)
  6. Financial strategy (how decisions associated with investment are made)
  7. Sales prediction and benefits for investor (why the company that is going to provide needed funds should do this)
  8. Investment decision (steps that should be made to come to a final decision)
  9. Conclusions and recommendations (overall conclusions; ideas on how to increase investment)

When developing my project, I will focus on the fact that the information associated with the foreign investment is less complete and accurate in comparison to domestic one that is why it is more difficult to make a final decision. Further, I will consider the stock of my company can be purchased by another multinational firm, or it will be critical to focus on direct investment. It will be significant for me to discuss taxes in both countries, depreciation allowances, and access to capital resources. I will think of associated risks. These will include exchange-rate risk, political issues (restrictions that lead to losses), and different laws that are associated with the investment (they can require additional expenses or a particular amount of domestic subsidiaries) (Editorial Board, n.d.).

When discussing decision-making process, I will definitely reveal the way foreign affiliates are treated in comparison to local ones and discuss the efficiency of domestic markets. I will reveal the peculiarities of the trade policy as well (Buckley & ‎Ghauri, 2015). After discussing those obstacles that may affect the cooperation between businesses, I will consider business facilitation measures because they provide an opportunity to reveal those benefits of foreign investment that were overlooked previously. Considering the topic of the project, it will be important for me to pay attention to the balance of payments and the principal accounts. Thus, I will discuss exports and imports of the company as well as capital flows. The focus will be made on the macroeconomic indicators. In particular, my attention will be paid to the economic growth, macroeconomic stability, health of the banking system, and interest rates.

All in all, my foreign investment decision process will start with the description of the investment necessity and then focus on the host country. Its political climate will be considered, and the whole strategy will be discussed on the basis of the obtained information. Then the cash flow analysis will be conducted and the required rate of return identified. Thus, it will be possible to pass to the economic assessment and the very selection. Risk analysis will provide an opportunity to realize if the initial decision is correct (“Factors influencing foreign investment decisions,” 2017). On the basis of the obtained information, it will be possible to start the very implementation. Control of expenditures and post audit will ensure the successfulness of the operation. When selecting a country and a business for the search of foreign investment, it will be significant to start with the profit opportunities. Further, possible limitations observed within the tax policy, diversification, environmental and organizational factors and be considered.

Thus, it can be concluded that I will make much effort to develop the Comprehensive Project so that it meets all requirements. A vast amount of attention will be paid to the conduction of research because this part of the assignment allows gathering information that will affect the whole work. On the basis of my own analysis, I will identify the most significant findings and use them to prepare my project. I will follow the outline provided in this paper to ensure that I discuss foreign investment in detail.

References

Buckley, P., & ‎Ghauri, P. (2015). International business strategy: Theory and practice. New York, NY: Routledge.

Editorial Board. (n.d.). Global financial management. Schaumburg, IL: Words of Wisdom, LLC.

(2018). Web.

Factors influencing foreign investment decisions. (2017). Web.

Step 5: Writing and presenting your findings. (2018). Web.

What is foreign investment? (2018). Web.

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"Foreign Investment Decisions." IvyPanda, 28 May 2021, ivypanda.com/essays/foreign-investment-decisions/.

1. IvyPanda. "Foreign Investment Decisions." May 28, 2021. https://ivypanda.com/essays/foreign-investment-decisions/.


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IvyPanda. "Foreign Investment Decisions." May 28, 2021. https://ivypanda.com/essays/foreign-investment-decisions/.

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IvyPanda. 2021. "Foreign Investment Decisions." May 28, 2021. https://ivypanda.com/essays/foreign-investment-decisions/.

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IvyPanda. (2021) 'Foreign Investment Decisions'. 28 May.

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