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Recent corporate scandals have reinforced the importance of business ethics, and have spurred additional regulations and corporate oversight.
The effects of changing information technology have had a profound effect on all aspects of business finance.
The continued globalization of business.
Financial Management Issues of the New Millennium
The effect of changing technology
The globalization of business
1. Improvements in communications and transportation – lower transactions cost
2. Increased power of consumers – more choice, consumer sovereignty
3. Increased cost of developing new products – global markets spread fixed costs over more units
4. MNCs must be able to shift production globally to take advantage of cost efficiencies.
Percentage of Revenue and Net Income from Overseas Operations for 10 Well-Known Corporations, 2001 Company % of Revenue from overseas % of Net Income from overseas Coca-Cola 60.8 35.9 Exxon Mobil 69.4 60.2 General Electric 32.6 25.2 General Motors 26.1 60.6 IBM 57.9 48.4 JP Morgan Chase & Co. 35.5 51.7 McDonald’s 63.1 61.7 Merck 18.3 58.1 3M 52.9 47.0 Sears, Roebuck 10.5 7.8