The purpose of this case study is the application of knowledge gained during the first seven wee- ks of this class. Various aspects of the information provided during the course will apply. Background of Case A local company in Mexico, which manufactures widgets, is faced with saturation in the domes- tic market. They have developed an international sales division and have begun selling their wid- gets internationally, however, they are now facing challenges regarding rising expenses with no foreign operations. In a recent Board meeting, senior management, with the Board of Directors' approval, gave the green light for a new multinational strategy to set up foreign operations. The goal is for the com- pany to now work on a formal multinational strategy with department heads, including finance and accounting managers. The goal is to explore the pros and cons of different strategies before making final decisions. The strategy itself is to focus on three areas of growth in its operations. The first is the U.S. and Canada due to the proximity to Mexico. Then Asia, because of the potential advantages to be de- rived from the emerging economies and cost benefits. Finally, the European and Latin American operations-as the company is established in other foreign markets. Due to the complex nature of the multinational strategy, the company has hired a consulting firm to help with the overall structure. You, as the Director of Financial Management, including the finance and accounting departments, will be suggesting multinational strategies. A template of considerations utilized by the consulting firm has been given to you (attached to this case). You will follow this template to evaluate the options, based on the pros and cons of each approach. Introduction Introduce your case here. Use the case analysis review to assist. NOTE: THE FOLLOWING BOLD-FACED HEADINGS SHOULD BE USED TO ORGANIZE YOUR PAPER. KEEP THEM CENTERED. Multinational Organizational Structure Focus on discussing the structure of new foreign entities. Explore the Week 1 readings and Week 4 readings. The goal is to discuss the pros and cons of various structures. Also, focus on basic strategies of accounting and finance departments and the challenges that multinational corporations face in financial management that can be found in the Week 4 readings Agencies, Organizations, and International Laws and Agreements Utilize the Week 2 readings to discuss the challenges and opportunities for the various agencies, organizations, and international laws and agreements. Focus on each geographic region that the company wants to develop, including the U.S./Canadian region, Asia, Latin America, and Europe. Include how these challenges and opportunities impact the financial ma nagement of the organizations. Also, discuss ethical policies that may be considered in foreign operations. Foreign Exchange Markets Utilize the Week 3 readings to discuss the challenges in foreign exchange markets. Focus on any exchange rate risks, transaction/translation/operating exposures, and monetary policies that can have an impact in the different regions the company wants to enter. Provide recommendations on how to hedge or limit the exposures and risks in the foreign exchange markets. Capital Structures and Cash Management Utilize the Week 5 and Week 6 readings to evaluate the different methods to source capital for multinational operations. Debt versus equity, budgeting, forecasting, and cash flows should be discussed. International Accounting Standards Utilize the Week 7 readings to discuss international accounting standard considera tions. Use the IFRS discussion to focus on the generalization of concerns with how to report and present financial information from foreign operations. Focus on the challenges that multi national corporations face more than the specific laws and standards. Conclusions and Recommendations Finally, conclude your paper by summarizing the previous sections and include basic recommendations on the best approaches and practices in your summary
