A greater quality of information is available for example in the leading financial centers globally that would otherwise not be the case in more remote regions, making it possible to make more informed and correct decisions (Mitsos, 1997). The accuracy, efficiency and speed of decision-making based on more efficient use of information has led to more advanced forms of cash management than would have been the case on a per-subsidiary level (Fresard, Salva, 2010). Lastly, by having a centralized depository of cash for all subsidiaries, firms can hold less accumulated total cash, freeing up financial resources for other investments (Fresard, Salva, 2010). Companies become more efficient at financial management as a result.
References
Elliott, Graham, & Bewley, Ronald. (1994). The transmission of monetary policy: The relationship between centralized depositories and Monetary policy. Economic Record, 70(208), 19.
Fresard, L., & Salva, C.. (2010). The value of excess cash and corporate governance: Evidence from U.S. cross-listings. Journal of Financial Economics, 98(2), 359.
Hill, C.W.L. (2011). International business: Competing in the global marketplace (8th ed.). New York, NY: McGraw-Hill/Irwin.
Nicholas Mitsos. (1997, November). Virtual Group Treasury. TMA Journal, 17(6), 24-30.
How are dividend remittances used by firms to transfer funds from foreign subsidiaries to the parent company?
Dividend remittances are often used as a means to transfer funds and capital for investment to foreign subsidiaries and bypass taxes and duties in the process (Hill, 2011). This approach to capital transfer happens most often in those organizations that are based on countries that have stable...
The localization strategy into Vietnam is also characterized by the fact that it ensures higher levels of business diversification for the company, which in fact serves the number one rule of investments -- portfolio diversification. This in essence means that, through the penetration of the Vietnamese market, the company would increase its sources of revenues and it would decrease its dependency on the more traditional manufacturing plants. Finally, the localization strategy
International Business Management AccuForm Corporate Corruption Case Analysis Establishing a subsidiary in a foreign nation poses many challenges. Corporate leadership challenges can often be the most daunting to resolve. One a most challenging leadership challenges is that of ethical considerations and corporate corruption. Corporate cultures differ and these differences can create major difficulties for foreign subsidiaries. This case involves corporate espionage and the theft of proprietary product information, as well as the
International Business Competitive strategy is the bedrock on which companies base business decisions to reach their targets and achieve profitability. Formulating and implementing strategies in international business is much more complicated and difficult task than doing so in home or familiar markets. Competitive strategy deals with the development of abilities by a firm to keep ahead of competitors in the fields in which it operates. Firms develop competitive edge in global
Risk in Business Every business faces risks, and when appropriately handled, risks typically prove advantageous to businesses for both growth and profit. Risks are an ever-changing, fluid element to any businesses, so the constant evaluation and application of risk management methods is critical to the success of businesses. According to Douglas Hubbard, risk management is, "the identification, assessment, and prioritization of risks followed by coordinated and economical application of resources to
In the U.S., the concept of a dead line is standard; in societies of the Middle East this is not even a concept to recon with. Time is also a strategy that is used by different cultures to signify different conditions. In Latin America, waiting for an appointment with a senior is normal and not to be considered an insult. In the U.S., the amount of time spent waiting
3. Describe some factors you would consider when selecting a strategic alliance partner. Explain what you would do to insure the success of such a partnership. Starting with financial viability and moving into the specific areas of expertise in a given market, potential strategic alliance partners need to be evaluate on their ability to continually innovate as well (Jamali, Yianni, Abdallah, 383, 384). In addition, their role in the overall market
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now