Businesses do not exist in a vacuum. Outside factors affect them, and those factors often extend beyond national borders. Global forces affect competition, available resources and even how businesses interact with their customers. To pursue growth, businesses have to adapt to ever-changing markets.
As the world becomes increasingly interconnected, more and more businesses are venturing into international investments and operations. For these businesses, special strategies are necessary to keep up with the demands of the global economy. Students in an online Master of Business Administration (MBA) with a Concentration in Finance program learn to tackle the unique challenges posed by global finance.
The Global Economy Is Interconnected
Financial situations in countries all over the world affect the global economy. New advancements in technology promote globalization, further connecting the world’s financial markets. In addition, government policies and regulations in countries across the globe have been instrumental in opening foreign markets for international trading. As globalization continues, businesses find it easier to grow beyond their countries’ borders and participate in global markets.
International business opportunities have become a major part of the current global economy. Many governments encourage international commerce, resulting in fewer barriers to importing and exporting, so even individual citizens can take advantage of foreign markets through personal investments.
Globalization means an individual nation’s economy can positively influence others, but negative effects are also a risk. Internal financial disasters can now more easily affect outside countries. A potential debt crisis in one nation could decrease confidence in investing and destabilize financial markets worldwide. Factors like these compound, resulting in a global environment of volatility, uncertainty, complexity and ambiguity (VUCA).
The global economic situation can affect banks’ willingness to lend capital, which may harm businesses in the startup phase. Increased competition is a side effect of the increased market potential offered by globalization and impacts how businesses interact with each other and their customers.
Numerous interconnected factors can further complicate global economic conditions and growth for both developed and developing countries. The World Bank notes how a “multitude of risks” like “food insecurity, climate change, rising inequality, demographic change, and the socio-economic impacts of the [COVID-19] pandemic” affect instability-inducing levels of fragility, conflict and violence (FCV). With inflation in many countries soaring to its highest levels in decades, people around the globe can understand how world events have very real, day-to-day financial impacts on interconnected economies, individuals and organizations of every size.
The Benefits of Studying Global Finance in an Online MBA Program
Studying global finance allows MBA students in finance to best leverage the benefits of the global economy while navigating the many challenges it presents. Special considerations are necessary when companies get involved with international markets; studying these markets will position MBA students as competitive job candidates.
The online MBA – Finance program at Texas A&M University-Corpus Christi, for example, offers finance concentration courses that include international finance. Students can expect to learn about the following:
- Financial planning and decision-making for corporations in multinational environments
- Measuring and managing risks associated with currency exchange rates
- Financing international trade
- Foreign investment
- Analyzing risks on a per-country basis
- The role of financial institutions in the global economy
- Financial regulation
- The global impact of central banking monetary policy
Participating in international financial transactions can give organizations opportunities for growth but also carries additional risks. For example, currency exchange rates are constantly changing. This means that investments in foreign markets can change in value simply because of exchange rate fluctuations.
Organizations must weigh the pros and cons of engaging in foreign business activity and decide on a case-by-case basis whether the risks are worth the potential reward. Finance professionals are often responsible for accessing these factors and finding ways to mitigate risks. This requires a solid foundation in financial skills and a working knowledge of the complexities of multinational finance.
The global economy affects businesses worldwide, especially those involved in international markets. Businesses can enter foreign markets in various ways, and a company’s financial professionals must analyze the benefits and risks involved. Students pursuing an MBA in finance learn the global finance skills they need in today’s complex marketplaces. With these skills, they are better prepared to guide a company through the international financial landscape.
Learn more about the TAMU-CC online MBA – Finance program.