This study attempts to develop a conceptual frame work to deal with
operations and management in a foreign business environment. The
study develops a measure for business financial performance by
employing factor analysis methods to integrate three profit-related
ratios, derived from Modified DuPont Model, utilizing financial
performance data from 630 multinational companies ranked in
Business Week's Global 1000 report between years 1994-1997.
In the analysis of multinational companies cases, approximately
400 sets of financial data (Return/Assets, Return/Revenues,
Return/Equity), were categorized and computed for intercorrelations
and development of the financial performance index. A new financial
performance measure was derived and termed the Financial
Performance Index or FPI. Indices trends for 4 years were generated
and compared among four parent countries (France, Germany, Japan,
and U.S.), across four selected industry groups, i.e., automobile,
pharmaceuticals, electric and electronic equipments and banking. In
the analysis of the multinational companies data, the financial
performance index exhibited patterns and trends which varied by
country and across industry groups; moreover, they added analytical
depth when interpreted along with market shares and sales mode.
To test the hypothesis that a multinational company's financial
performance in foreign business environment is linearly related to
the host country's political conditions. Twelve political
uncertainties indicators (independent variable) in thirteen host
countries were chosen to test for linear relationship with the
level of financial performance index (dependent variables).
Five equations were formulated to predict the Financial
Performance Indices of the four selected industries and the country
composite. A step-wise method of multiple regression analysis was
employed to measure and determine a predication equation with most
favorable financial performance in thirteen host countries of four
major industries, i.e., automobile, pharmaceuticals, electric and
electronic equipments, and banking. The combination of political
risk indicators in the host country can explain the variations of
the country composite FPI and the FPI across four selected
Results of multiple regression analysis support the hypothesis,
enabling prediction of the FPI as well as analysis of the
differential importance of the political risk indicators. A model
of international business operations was fully developed to be
applied as a conceptual framework for further research and
practical applications in the field of international business
|Country of origin:
||Electronic book text - Windows
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