Course Code: MGNM578 Course Title: International Business Environment Course Instructor: Dr. Vishal Sarin Academic Task No.: 1 Academic Task Title: Assignment I Date of Allotment:21-12-2021 Date of submission: 26th December 2021 Student’s Roll no: RQ2154A06 Evaluation Parameters: Student’s Reg. no: 12101924 Declaration: I declare that this Assignment is my individual work. I have not copied it from any other student‟s work or from any other source except where due acknowledgement is made explicitly in the text, nor has any part been written for me by any other person. Student’s Signature:- Evaluator’scomments (For Instructor’s use only) General Observations Suggestions for Improvement Evaluator‟s Signature and Date: Marks Obtained: Max. Marks: ………………… Best part of assignment Pandemic brought many economies at stand still and which possibly translate in to technological and operational risk of the societies. How do you see these risk as threat to global business environment and the very idea of globalisation would be jeopardise? Suggest strategies to MNCs to cope up with such technological and operational risks they face? [Technological and operational Risk includes Industrial Accident, Transport Accident and Cyber Disruption]. The COVID-19 pandemic has arisen as a new element that will have long-term policy implications for the regulation of international commerce and multinational firms' foreign direct investment (FDI) (MNEs). Foreign direct investment (FDI) is being harmed. "Global pandemic mitigation measures and lockdowns will have disastrous impacts on all economies, regardless of their linkages to global supply networks," according to UNCTAD. As a result, the demand shock will be the most important factor stifling investment." According to UNCTAD, the pandemic might result in a -30 to -40 percent decline in global FDI flows between 2020 and 2021. Similarly, MNE profits are expected to decline. "On average, the top 5000 MNEs, which represent for a large part of global FDI, have now experienced 30 percent lower revisions of 2020 profit predictions owing to Covid-19, and the trend is expected to continue," according to UNCTAD. https://unctad.org/news/coronavirus-could-cut-global-investment-40-new-estimates-show (Website, UNCATD) Many research organizations has lowered its growth expectations for a variety of areas, including China, the United States, and oil prices. The consequent slowdown in global growth will have ramifications across a variety of sectors, hampered multinationals' ability to meet 2020 ambitions, and thrown off company predictions and business plans for the coming year. Companies will now have to deal with currency devaluation caused by the combination of oil prices plummeting and global financial markets driving a flight to safety, in addition to the demand, confidence, and supply chain disruptions created by the spread of COVID-19. As a result, regardless of the severity of COVID-related concerns in specific nations, pricing strategies and customer price sensitivity will be a challenge for businesses to overcome in the coming months. We can see the trends in the operations of the multinational corporations evolving suring the covid. A very live testimonial is given by Deolitte and KPMG on how they are dealing with the Covid-19 pandemic and have attached the links for the same. https://www2.deloitte.com/cn/en/pages/tax/articles/impact-of-coronavirus-to-multinationals.html (Website, Deolitte) https://home.kpmg/xx/en/home/insights/2020/03/the-business-implications-of-coronavirus.html (Website, KPMG) Kevin Sneader, global managing partner at McKinsey, shared his insights on the Covid-19 pandemic during an interview with CNBC. In this interview some major questions were addressed like : Q. The globe is adjusting to what COVID-19 means for the economy and for their own enterprises, and everyone is attempting to determine what the new normal will be. Q. What are the other trends that we are seeing, and this has perhaps been exacerbated by the COVID pandemic, but trends that had already started a few years ago following the 2008 financial crisis, the retreat of globalization and the move towards de-globalization, what do you believe we will now start to see, and what will that mean in terms of global supply chain restructuring and reordering? https://www.youtube.com/watch?v=zshmZ-kBMeA&t=33s (YouTube, CNBC) The most basic structure of multinational Corporations includes a parent organization that owns all licensed innovation rights, contract makers or undeniable makers who complete the creative work in low-cost countries, and restricted or undeniable wholesalers who sell the finished goods in various business sectors and behaviors market explores in their countries of operation. In terms of scope and power, the pandemic influence on financial mobility differs. This has resulted in unparalleled levels of flaws. The main features of global financial management of MNCs (Multinational Corporations) are depicted in this paper, together with country-specific and primary risks. Fundamental information is gathered from a variety of online media, astute publications, various types of examination papers, and other internet sources, among others. The expansion of greatness and the development of monetary exchanges are linked to the globalization of financial management of MNCs (Multinational Corporations). Finally, all regions demonstrate and explain this issue in full, as well as offer a few solutions for overcoming the current situation. Despite a severe second wave across the world, most businesses claimed localized lockdowns were less disruptive than last year, and sales are growing month after month. Vasant Prabhu, vice-chairman of payment technology provider Visa Inc, said there was a dramatic drop in consumer spending in India starting in mid-April and continuing through May, but that it was quickly recovered, with July trending well above 2019 levels. With the number of Covid cases in India reaching an all-time high in April, the second wave of the epidemic led in limitations on movement and selling of both necessary and leisure goods. Apple, on the other hand, reported record June quarter sales in India, with significant growth, according to chief executive Tim Cook, who spoke on the company's results call on Tuesday. Cook claimed the performance were driven by Apple's whole product line up, but he did not comment on the India lockout. Chairman Michael D. Hsu of Kimberly-Clark Corporation stated that the firm had excellent double-digit growth in India in the June quarter and that it is continuing to invest in regions where business is going well. He believes that growth in areas such as India would be important in the coming years. Operations, no matter how well-established, are being impacted by the Covid-19 collapse, which has been followed by social distance and a statewide lockdown, and are being forced to reevaluate how they manage and conduct their businesses, including revisiting their business plans. Due to lower revenue churn and the general uncertainty in the global financial landscape, most firms have found it difficult to keep their financial wheels going during the lockdown period. To mitigate risks and endure the slowdown induced by the impact of COVID19, startup entrepreneurs will have to adjust to a new set of laws and be cautious of the following considerations during these trying times. Keeping track of expenses in relation to revenue It is critical for businesses to do a thorough assessment of their fixed and variable expenses, as well as actual income, during this outbreak. This evaluation will provide a comprehensive image of a company's financial position and assist entrepreneurs in planning ahead in the current uncertain market. Even after the epidemic effect has subsided, this method can be implemented. Examining the business model's viability Given that the market changes every week (for the worse), it's critical to revisit your business model and review where your company sits in terms of revenue and expense projections. This is also an important moment to keep an eye on your financial KPIs and cash flow. Keep in mind the length of your runway. Businesses must assess how new sales, collections, credit cycles, and possible bad debts will be affected. 3 month, 9 month, and 18 month PLAN policies Because it's impossible to predict how long this outbreak will endure, it's crucial to be ready for any eventuality. If we think of it as a three-month problem, a one-time freeze on variable costs like as hiring, marketing, and travel can help. If the crisis lasts for nine months to a year, however, entrepreneurs will need to rethink their business plan in order to cut variable costs, renegotiate fixed costs (rent, salary, equipment leasing payments, and so on), and concentrate only on the fundamentals for survival. It might be worthwhile to reconsider your sales technique, such as whether to sell online or in person. Examine whether marketing expenses need to be reduced or increased. If the pandemic's effects last for 18 months or longer, major measures will be necessary. Businesses will have to plan ahead, communicate well, and act compassionately. They would necessitate a new operating plan, as well as a change of sales revenue goals and product schedules. In that circumstance, entrepreneurs and leaders would need to communicate with their investors and employees as openly as possible. Be patient in securing investments Every firm need funds to operate, and the issue on every founder's or entrepreneur's mind in these trying times is where they will receive that capital. Many funds have sufficient cash to deploy in the future years and may not hesitate to do so.
