Week 4 Discussion Responses

Week 4 Discussion responses Int_Biz

Discussion Response 1


Foreign Direct Investment (FDI) refers to the ownership of a country’s business or properties by entities not domiciled there (“Foreign Direct,” n.d.). According to the International Monetary Fund, foreign direct investment occurs when an individual or business owns 10% or more of a foreign company’s capital. If an investor owns less than 10%, it is considered an addition to his/her stock portfolio (Amadeo, 2017). A Harvard Business School paper published over 30 years ago summarized the benefits of FDI based on extensive review of the economic literature. The FDI’s benefits include job creation, transfer of technology, access to international markets as well as access to international financing (Fruman, 2016).

Potential drawbacks (costs) include a deterioration of the balance of payments as some profits are distributed to the investing country, a lack of positive interfacing with local communities, the potentially harmful environmental impact of FDI, especially in the mining, mineral and petroleum industries that can generate some internal resentment of depleting a finite amount of natural resources and sharing the profit with foreigners. Social upheaval can be caused by commercialization/rapid change of lifestyles in developing countries and the effects on competition in the internal national markets. Moreover, some host country authorities see an increasing dependence on FDI as losing control of their countries representing a loss of political sovereignty (“Chile Foreign,” n.d.).

In terms of FDI, Chile is considered the third most attractive country in South America, after Brazil and Colombia. Also, Chile ranks fifth place among the countries that are the most open to imports and foreign investment in the world. Chile’s economic policies are founded on the principles of capital transparency and non-discrimination against foreign investors. Equally important, investors are attracted by the richness of Chile’s natural resources, the stability of its macro-economic system, its growth potential, its low level of risk and the high quality of its infrastructure. Some of the foreign companies in Chile include Oracle, McAfee, WorleyParsons, Jazzplat, Synthon and Pioneer (“Chile Foreign,” n.d.).


Amadeo, K. (2017, June 24). Foreign Direct Investment: Pros, Cons and Importance. The Balance. Retrieved from https://www.thebalance.com/foreign-direct-investment-fdi-pros-cons-and-importance-3306283

Chile: Foreign Investment. (n.d.). Santander. Retrieved from https://en.portal.santandertrade.com/establish-overseas/chile/foreign-investment

Foreign Direct Investment (FDI). (n.d.). In Business Dictionary online. Retrieved from http://www.businessdictionary.com/definition/foreign-direct-investment-FDI.html

Fruman, C. (2016, June 06). The false debate: choosing between promoting FDI and domestic investment. World Bank Blogs. Retrieved from https://blogs.worldbank.org/category/tags/fdi-inflows-developing-countries

Discussion Response 2


Foreign Direct Investment (FDI) is differentiated between flow, the amount of FDI has undertaken and stock, the total accumulated value of foreign owned assets in a given time (Hill & Hult, 2016). Additionally, an outflow of FDI is the investment flowing out of the country, whereas an inflow of FDI is the investment flowing into the country (Hill& Hult, 2016).

Ethiopia saw a dramatic reduction in its levels of inflow FDI during 2016, receiving only 12 new projects, a disappointing return following several years of increasing inward investment (Anderson, 2016). In 2015 there were 30 inflow FDI projects and 33 inflow projects in 2014, the most since 2003 (Anderson, 2016).

FDI policy of Ethiopia allows foreign investors to invest alone or in partnership with domestic investors in areas open for FDI (Ethiopian Investment Agency, 2013). There are no restrictions on equity ownership in joint venture, but investment permit will be required to allocate minimum capital (Ethiopian Investment Agency, 2013). Benefits of FDI in Ethiopia can provide Ethiopia with opportunities to build infrastructure such as new roads and railways, enhance water supply for much of the population, and expand electricity coverage among many other investment opportunities (Ethiopian Investment Agency, 2013). However, costs of FDI could include a deterioration of the balance of payments as profits are repatriated, a lack of positive linkages with local communities, the potentially harmful environmental impact of FDI, especially in the extractive and heavy industries, social disruptions of accelerated commercialization in less developed countries, and the effects on competition in national markets (Getinet, 2017).


Anderson, M. (2016). Ethiopia experiences FDI woes. Retrieved 9/19/2017 from http://www.fdiintelligence.com/Locations/Middle-East-Africa/Ethiopia/Ethiopia-experiences-FDI-woes

Ethiopian Investment Agency. (2013). Overview of Ethiopian Investment Policy. Retrieved 9/19/2017 from http://mci.ei.columbia.edu/files/2013/10/Invest-in-Ethiopia-Focus-Mekele-by-EIA.pdf

 Getinet, B. (2017). Ethiopia: FDI Inflows for Development – Maximizing Benefits and Minimizing Costs. Ethiopain Herald. Retrieved 9/19/207 fromhttp://allafrica.com/stories/201510151199.html

 Hill, C. W., & Hult, G. T. (2016). Global business today. New York, NY: McGraw-Hill Education.

Week 4 Discussion responses Fin_Acct

Discussion Response 1


Establishing internal controls is absolutely imperative for the mitigation of fraudulent or accidental financial errors. The current environment describes lacks structured processes that prevent financial mismanagement. As a new Director of Development for the non-profit, I would look to establish a few key requirements to cultivate an environment of proper conduct and efficient management of checks. 

The Bureau of Audit at New York’s Office of Mental Health has a recommended list of the top ten internal controls to prevent financial mismanagement – many of which apply to checks. The number one rule that they mention is a checks and balances that does not give a single individual responsibility over the checks. At the same time, these checks need to be managed within one single location to prevent accidental misplacement of checks and need to be recorded to completeness. 

To achieve these requirements, I would have an office in the mail room dedicated to opening and logging checks, requiring the signature and marking “For Deposit Only” from two or three well-trained employees. Each mail opener will keep an private, individual log of each check as it is processed. Working together, they can efficiently cover the checks received on the day, record the accounts receivables and organize all checks will all associated documentation in a biometric lockbox for the manager to deposit at the end of the week. Lastly, to prevent potential fraud, the signature of a manager or executive will be required for the signature of a check of a donation larger than $250. These steps create accountability and traceability of all checks as well as protecting the checks from fraudulent behavior through a serious of checks and balances. 


Office of Mental Health. (n.d.). Top Ten Internal Controls to Prevent And Detect Fraud! Retrieved September 20, 2017, from https://www.omh.ny.gov/omhweb/resources/internal_control_top_ten.html

Discussion Response 2


As the new Director of Development in Goodworks non-profit I would make adjustments to the current donation process. To begin with, anyone involved should be held accountable for their actions and keeping a log that tracks incoming deposits would be necessary with a dual control in place. Proper segregation of duties which are described as the basic building blocks of sustainable risk management and internal controls are also key (Segregation of Duties, n.d.) The person responsible for incoming mail would log the checks and a reviewer would ensure that they are listed. Both individuals would sign. Deposits would then be made by the manager of Accounts Receivable who would have a deposit slip that can be related to the original incoming mail log. Finally, to ensure proper controls and that everyone is being responsible and honoring their fiduciary duties at Goodworks, I believe a bank reconciliation should be done by a completely independent individual. This person could then use the incoming mail log, signed off by the preparer and reviewer, also the deposit slips and bank statement. If there are any documentation that reflect outgoing transactions, those too would be provided to the individual responsible for the bank reconciliation. 

In my experience, there has been very strict internal controls on these type of transactions as well as very relaxed controls. The safety net for both of these processes has been the bank statement reconciliation which has always been segregated appropriately to an independent individual. Along with this there are other measures that can be taken by employers to ensure that the individuals involved in monetary transactions are trustworthy. This means having employees undergo thorough background checks. In my experience, working with banks and in departments where sensitive information is handled, I have always had to accept and go through these processes. While I know my character, the firm’s job is to set proper internal controls to protect it’s assets. I see this starting right at the beginning with hiring and going all the way to everyday processes such as the logs, segregation of duties, and independent reconciliations mentioned.

Segregation of Duties . (n.d.). Retrieved September 20, 2017, from http://www.aicpa.org/InterestAreas/InformationTechnology/Resources/Auditing/InternalControl/Pages/value-strategy-through-segregation-of-duties.aspx