Risks and Support for Australian Companies with Overseas Operations

This report discusses the risks faced by Australian companies with overseas operations, including political and legal risks. It also explores how these risks have impacted Globe International and the steps taken by the company to mitigate them. Additionally, it highlights the grants and support provided by the Australian government to companies involved in exporting.

International Accounting

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Some of the key risks that Australian companies with overseas operations are exposed to.......3
Risk impacted the Globe International and the steps taken by the company..............................3
Grants and support the Australian Government offers to the Australian companies who
exports.........................................................................................................................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Every business organization is exposed to the certain level of risk for which it requires
getting prepared. The level of risk increases on the international aspect as it includes the other
nation as well and its well-being. This report states about the risks which the Australian
companies having business operation globally. Along with that it includes the impact of risk on
the Globe international and the key steps taken by the company for mitigating it and the grants
and the support government has offered to the companies who are exporting.
MAIN BODY
Some of the key risks that Australian companies with overseas operations are exposed to
There are various risk which the exporting Australian companies are exposed to are
stated below.
Political risk: The political instability in the destination place is the major risk having an
impact over the business (Bui and De Villiers, 2017). For example, trade embargos which is
implemented by the govt. and the other international community has an influence over the flow
of products and services along with having an impact over delivery of the same.
Legal risk: The law in Australia is different from that of the law in the other country,
therefore, it is important to understand what difference it makes and how it will influence the
ability of the business entity in order to successfully export the goods and services (McClure,
Lanis and Govendir, 2016). The companies are required to be carefully while entering into the
contract, patent registration and the product liability law and other business related laws.
Quarantine compliance risk: Currently the world is facing pandemic period and most of
the countries are having strict quarantine needs (Sheehan, 2019). It becomes very important for
the companies to be aware about the quarantine regulations of each country in which it is
exporting or having business operation. Failure to comply with the same will result into
destruction of the goods or the imposition of the fines.
Risk impacted the Globe International and the steps taken by the company
Globe International is a multinational Australian company, having business operation
expanded globally. The risk has affected the business operation of the company as well. First is
the various regulation imposed by the other nations had a huge impact over the movement of the
goods of the company. Such type of risk has also affected the payment procedures as well.
Second is having a global exposure requires the company to have immense knowledge about the

same otherwise it will increase the chances of risk for the business. The most of the common
problems that the business is exposed to is in respect to the intellectual property rights, taxation
and the revenue regulations, dispute resolving mechanism or the misrepresentation laws (Zhu
and Sardana, 2020). The third is that the emergence of covid 19 has affected the import and
export of the goods and services of the company which is because of the restriction imposed by
the governing bodies of the respective countries. This has resulted into hampering of the
operation of the business and the production as well.
The Globe International has taken various steps in order to effectively manage the risk or
to reduce the effect of the same. The company has employed an effective team having
knowledge and understanding of the political environment of the various nation and how the
business can cop up with the same in order to remain in the market and to avoid any problem
pertaining to the change in the regulations (Zhu and Sardana, 2020). Also, the legal team of the
company is highly experienced and knowledgeable which has helped it in ensuring that all the
regulations have complied with respect to the different nations which has resulted into mitigating
the risk exposure associated with the legal factor. The quarantine is something which came
suddenly and made huge impact over the business on global level. Here, the company was not
able to handle the same so it focussed more over the domestic and the national trade as in other
nations lock down was imposed with shutdown of the flights for months.
Grants and support the Australian Government offers to the Australian companies who exports
The exporting provides huge advantage to the Australia and therefore it gains lot of
support from the government in the form of grants and support at all the levels. Along with this,
there is potential benefit to the businesses as well, but they are exposed to risk and cost in respect
to serving the other nations. The different types of assistance provided are described below.
 Export Market Development Grant, in this reimbursement of the amount up to $150k
is provided which is based on the 50% of the export marketing cost which can be claimed
for promoting the goods and services of Australia (Xiang and Worthington, 2017).
 TradeStart, this assistance is in partnership with the all the levels of government,
industry associations and the commerce association in order to assist the SME exporters
for accomplishing the long term success in the global market.
 Wine Export Grants, under this grant amounting to $25000 is being offered to the SME
producers of wine with the objective of grabbing opportunities in the nations like China

and USA (Australia, 2016). It provides reimbursement grant in regard to the specific
promotion related activities which is incurred at the single marketing visits.
 Australian Trusted Trader, is the assistance which is offered to the Trusted Traders
which involves reducing the red tape at the border and enhancing the export markets.
Along with this, it will help in expedites the movement of the cargo in and out of the
Australia leading to quicker reach to the desired market.
CONCLUSION
It can be summed up from the above that with the changing market conditions the level of
risk in the market also changes. Therefore, it becomes very important to determine the factors
which might have a huge influence over the business operation. The various risks that Australian
companies were prone to and measures by the company for mitigating the same. The support and
the grants offered by the government in Australia has helped in enduring the long term of the
business in the international market.

REFERENCES
Books and Journals
Australia, M., 2016. National contemporary music plan. Sydney: Music Australia.
Bui, B. and De Villiers, C., 2017. Business strategies and management accounting in response to
climate change risk exposure and regulatory uncertainty. The British Accounting
Review. 49(1),. pp.4-24.
McClure, R., Lanis, R. and Govendir, B., 2016. Analysis of tax avoidance strategies of top
foreign multinationals operating in Australia: An expose. Working Paper.
Paul, S. K. and Chowdhury, P., 2020. A production recovery plan in manufacturing supply
chains for a high-demand item during COVID-19. International Journal of Physical
Distribution & Logistics Management.
Sheehan, C., 2019. Risk and Crisis Management. Contemporary HRM Issues in the 21st
Century, Emerald Publishing Limited. pp.89-101.
Xiang, D. and Worthington, A. C., 2017. The impact of government financial assistance on the
performance and financing of Australian SMEs. Accounting Research Journal.
Zhu, Y. and Sardana, D., 2020. Multinational enterprises’ risk mitigation strategies in emerging
markets: A political coalition perspective. Journal of World Business. 55(2). p.101044.