MINI CASE: NIKE’S DECISION

Nike, a U.S.-based company with a globally recognized brand name, manufactures athletic shoes in such Asian developing countries as China, Indonesia, and Vietnam using subcontractors, and sells the products in the U.S. and foreign markets. The company has no production facilities in the United States. In each of those Asian countries where Nike has production facilities, the rates of unemployment and underemployment are quite high. The wage rate is very low in those countries by the U.S. standard; hourly wage rate in the manufacturing sector is less than one dollar in each of those countries, which is compared with about $18 in the U.S. In addition, workers in those countries often are operating in poor and unhealthy environments and their rights are not well protected. Understandably, Asian host countries are eager to attract foreign investments like Nike’s to develop their economies and raise the living standards of their citizens. Recently, however, Nike came under a world-wide criticism for its practice of hiring workers for such a low pay, “next to nothing” in the words of critics, and condoning poor working conditions in host countries.

Required: Evaluate and discuss various ‘ethical’ as well as economic ramifications of Nike’s decision to invest in those Asian countries.

arris Inc. had the following transactions:

1. On May 1, Harris purchased parts from a Japanese company for a U.S. dollar equivalent value of $6,200 to be paid on June 20. The exchange rates were

2. On July 1, Harris sold products to a Brazilian customer for a U.S. dollar equivalent of $10,400, to be received on August 10. Brazil’s local currency unit is the real. The exchange rates were

Required:
a. Assume that the two transactions are denominated in U.S. dollars. Prepare the entries required for the dates of the transactions and their settlement in U.S. dollars. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

b. Assume that the two transactions are denominated in the applicable local currency units of the foreign entities. Prepare the entries required for the dates of the transactions and their settlement in the local currency units of the Japanese company (yen) and the Brazilian customer (real). (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate calculations and final answers to nearest whole number.)

Did you know that many companies are now asking their entire accounting and finance staff to sign off on the accuracy of their work for quarterly financial reporting? This is a relatively new trend where even "lower level" employees are signing these internal company documents. This then goes up the hierarchy chain to the highest level, CEO and CFO. Why are companies going to the lowest levels in the organization to do this now? What are some pros/cons of this approach?

: What aspects of cash flows is part of the financial manager's responsibility?

Elaborate on the financial management function. In particular, the inter-relationships between the CEO, and its reporting lines under CFO; who are the ultimate boss for CFO, and CFO responsibilities to the real boss?

If you are CFO of a big blue-chip company and would like to issue a bond (borrowing), what are the macro economic factors and others you will consider before the issuance of the bond?

Imagine you are the Chief of Human Resources for a global corporation with operations in three different countries. The CEO of the company wants you to come up with a new compensation plan based on the labor markets of the three (3) countries where the employees live and work, rather than basing it on the parent country’s labor market.

What are some of the biggest advantages and disadvantages of setting up a compensation system like this?\

Please in your own word!

You start a new job at a company that has been run the same for the past decade. You are asked to write a report to the CEO briefly analyzing the most important recent changes in the international country of your choice. You should provide two recent changes for each category.
a.            Economic
b.            Social
c.             Political
d.            Technological
e.            Ecological

Support your findings with statistics such as GDP, unemployment etc.