This document discusses several topics related to international finance management, including multinational corporations, factors that influence firms expanding into other countries, distinguishing factors between multinational and domestic financial management, agency problems that can occur between managers and shareholders, and how the internet facilitates international trade. A multinational corporation operates in two or more countries, managing global operations from its home country. Firms expand internationally to seek new markets and resources, gain efficiencies and technologies, and avoid regulatory obstacles. Managing multinationals differs from domestic firms due to currency exchange, economic/legal systems, languages, cultures, and government roles across countries. The internet allows improved communication between parent companies and foreign subsidiaries to monitor performance and streamline international shipping and

2. Subject:-
International Finance Management

3. Topic
1) Multinational Corporation
2) How Internet Facilitate International
Trade
3) Agency Problem

4. What is a multinational corporation?
A multinational corporation is one that operates in two or
more countries. A multinational corporation often has a
long supply chain that may, for example, require the
acquisition of raw materials in one country, a product's
manufacture in a second country, and its retail sale in a
third country. A multinational often globally manages its
operations from a main office in its home country.

5. Why do firms expand into other countries?
(1)To seek new markets.
(2)To seek new supplies of raw materials.
(3)To gain new technologies.
(4)To gain production efficiencies.
(5)To avoid political and regulatory obstacles.
Features:
(1)Giant size.
(2)International operations.
(3)Central control.
(4)International markets.

6. What are the major factors that distinguish
multinational from domestic financial
management?
(1) Currency differences
(2) Economic and legal differences
(3) Language differences
(4) Cultural differences
(5) Government roles

7. Agency problem
Conflict of goals between a firm's manager and
shareholders
Impact of Management Structure on Agency Cost:-
Some
MNCs attempt to strike a balance they allow subsidiary
managers to make the key decisions for their respective
operations, but the decisions are monitored by the parent’s
management to ensure that they are in the best interest of
the MNC.

8. Control of Agency Problem
1. Perent control of agency problem
2. Corporate control agency problem
Solution:-
1. Performance based compensation
2. Direct influence by shareholders
3. The hreat of firing
4. The threat of takeover

9. How internet facilitate international trade
Electronic networks make it easier for the parent to
monitor the actions and performance of foreign
subsidiaries.
For example, corporate intranet or internet email
facilitates communication. Financial reports and other
documents can be sent electronically too.

10. Advantages
• Increased revenues
• Decreased competition
• Longer product lifespan:-
Sales can dip for certain
products domestically as Americans stop buying
them or move to upgraded versions over time.
• Internet use in import and export
• Ocean shipping industry

11. Continue:-
The internet allows companies to easily
communicate with their shipping provider. This
one advancement has allowed industries and
companies to avoid major delays and has made
importing and exporting a streamlined and timely
process.

12. Thank youAny Question?