Research Project: Tesla's FDI and Profitability in Romania

This research project examines the impact of Tesla's foreign direct investment (FDI) on its profitability in Romania. The report begins with an introduction to FDI, Tesla's background, and the research objectives, including the impact of FDI on profits and ways to overcome its drawbacks. The literature review explores the existing knowledge on the subject, followed by a detailed methodology section outlining the research philosophy, approach, strategy, and data collection techniques, including a Gantt chart for project management. The findings and analysis section presents the results of the research, supported by data analysis, and is followed by a conclusion, recommendations, and reflection on the study. The project investigates the benefits of FDI for Tesla, such as market access and reduced production costs, while also addressing potential drawbacks like domestic investment displacement and political risks. The report suggests strategies for Tesla to mitigate these risks and maximize profitability in the Romanian market.

Research Project

Table of Contents
TITLE:.............................................................................................................................................3
ABSTRACT ....................................................................................................................................3
ACKNOWLEDGEMENT...............................................................................................................3
INTRODUCTION...........................................................................................................................3
Research objectives:....................................................................................................................4
Background Of Company ..........................................................................................................4
Rationale of the research ............................................................................................................4
Literature review .............................................................................................................................5
Methodology ...................................................................................................................................8
Introduction ................................................................................................................................8
Research philosophy...................................................................................................................8
Research Approach: ...................................................................................................................8
Research Strategy........................................................................................................................9
Research Choice: ........................................................................................................................9
Techniques and procedures of data collection: ........................................................................10
Research sampling: ..................................................................................................................10
Data analysis techniques: .........................................................................................................11
Access Negotiations .................................................................................................................11
Research Limitation: ................................................................................................................11
Ethical issue: ............................................................................................................................12
Cost:..........................................................................................................................................12
Gantt Chart................................................................................................................................13
Findings and Analysis ...................................................................................................................15
CONCLUSION .............................................................................................................................24
RECOMMENDATION ................................................................................................................25
REFELECTION ............................................................................................................................25
REFERENCES .............................................................................................................................27
Appendix........................................................................................................................................29

TITLE:
Foreign direct investment in Romania and profits. A case of Tesla.
ABSTRACT
Foreign direct investment is essential type of entry mode strategies used by an enterprise
to enter into international market successfully. It introduces as a direct ownership of facilities in
the specific nation. It basically involves the transfer of different resources such as technology,
personnel and capital. It may be created via the acquisition of a present entity or the
establishment of a unique organisation. Literature review have been done with the view point of
different authors and writers regarding the impact of FDI. Data about the topic have been done
with the support of different methods of research such as research philosophy, approach, design,
Gantt Chart, data collection and analysis techniques etc. Along with this, research findings and
analysis have been completed through questionnaire. It is a most essential method helped a
researcher to accumulate reliable as well as valid information about the topic. Conclusion and
recommendation have been completed via addressing all aims and objectives.
ACKNOWLEDGEMENT
I would like to thank my friends; they helped me to carry out this research. I must say
special thanks to my friends and relatives who were very helpful of me via this time when I was
doing the research. I am also thankful to my tutor who given me with direction and patience so
that I could have executed the research successfully.

INTRODUCTION
Foreign direct investment refers as an useful form of investment which is made by an
organisation 0into business interests located in another nation (Alfaro, 2015). Mainly it takes
place when a capitalist set up foreign business operations as well as acquires business assets,
covering setting ownership and monitoring interest in an international organisation. For this
project, Tesla is given American automotive organisation based in Palo, Atlo, California. It was
founded in year 2003 by Martin Eberhard, Marc Tarpenning, Elon Musk, J. B. Straubel, Ian
Wright. Company mainly specialise in in manufacturing electric car via its solar panel
manufacturing, solar city subsidiary. Apart from this, Tesla decide to expand their business
activities in Romania market through foreign direct investment.
Research Aim:
Main intent of this project is “To investigate the impact of foreign direct investment on
profits in Romania. A study on Tesla.
Research Questions:
 What is the impact of Foreign Direct Investment on profits for Tesla in Romania?
 What are the ways through which Tesla can overcome the drawbacks of foreign direct
investment ?
Research objectives:
 To determine the potential influence of FDI over the profitability of Tesla in Romania.
 To analyse the ways which could be beneficial for Tesla in addressing the issues related
with with FDI.
Background Of Company
For this Tesla is the chosen multinational organisation. They want to expand their
business activities in Romania. It is a market with excellent or fabulous potential, favourable
business climate and a strategic location. Its economy is among the European Union’s quickest
growing; approximately 4.8% growth in year 2016 and around 6.9% growth in 2017. This
growth is mainly based on primarily consumption which is driven by the legal authority of
Romania's. It is related with Romania's tax fiscal policy, including tax cuts, pension increase,
minimum wage maximises and public sector (Panait and Voica, 2017). Therefore, it is a best
market for Tesla to expand their business activities and accomplish competitive benefits easily.

Business activities of Tesla is mainly related with designing of goods and services, location
strategy, job design and human resources, inventory management, maintenance of financial
records etc. Thus, all these are major activities for an enterprise which will help them in its
development and success at global level (Gui-Diby and Renard, 2015).
Rationale of the research
Main rationale behind choosing this topic is to investigate the impact of foreign direct
investment on profits of Tesla in Romania It is a multinational corporation which will help in
growth of economy of Romania by providing job opportunities to citizen. Along with this,
globalisation is a large topic which will help a researcher to enhance their literature review skill,
data analyses and data interpretation skill (Boghean and State, 2015). These kinds of qualities
will help a researcher to conduct each activities of research systematically and successful
manner.
Significance of the research
There are different advantages of foreign direct investment such as it provides local
economics benefits in multiple locations, foreign income can maximise, it improves human
resources etc. All these benefits help an organisation by increasing its profit and market share
within given time duration (Estrin and Uvalic, 2016). Thus, with the help of research, a
researcher can easily identify significance of Foreign direct investment and its benefits to
TESLA.
Literature review
A literature review is a form of comprehensive summary of past topic. It includes, books,
scholarly articles, and many other useful sources relevant to the research or topic. Main purpose
of literature review is to provide a completed and accurate accounting of the actual state of
understanding for whichever investigation question is being addressed. Thus, it is an essential
and important aspects of scholarship because without it, scholar cannot judge or evaluate
whether the author is well-sophisticated or whether the activity that is being shown is original
and novel (Buettner, Overesch and Wamser, 2018). It is a more useful section for completing
research project in systematic manner. With the help of this section, an investigator can easily
critically analyse about the impact of foreign direct investment on profitability of business
activities in Romania market.

The impact of Foreign Direct Investment on profits in Romania
Foreign Direct Investment mainly takes place when a capitalist or investor establishes
confirmed international business operations. FDI is critical for emerging and developing market
nations. Their organisations require the multinationals' expertise and funding to enlarge their
global sales. Their nations require private finance in infrastructure, water and energy to
maximise wages and jobs. It offers different benefits to both the foreign host nation such as
Romania and the investor also. In a growing globalised economy, Foreign direct investment by
transnational organisation is introduced a main factor in the development of economy of less
developed economies, covering the economics of eastern Europe and central Europe.
Foreign direct investment in Romania measure to USD around 5.1 billion in year 2017,
up by approximately 3% compared to the similar time duration of 2016, according to information
by the Romanian National Bank and UNCTAD.
Source: Doing Business, 2019
From the above given graph, it has been concluded importance of Foreign direct
investment for profitability of Tesla. As in Romania index of transaction transparency is high as
compare to other countries such as United State, Germany, Eastern Europe and Central Asia. It
will help an organisation to enhance their profitability and market share within given time
duration. Along with this, index of manager's responsibility is moderate in Romania market
which will also support an enterprise to retain employees for long time (Foreign direct
investment (FDI) in Romania, 2016). As it will be more effective and important for success and
growth of company within given time duration. Index of shareholders power is also moderate in
Romania country which will also help a stakeholder within Tesla to take legal action and gain
competitive benefits easily. At last, the investor protection is around 6.0 % which will highly
impact on profitability and market share of company.
FDI in Romania has a positive impact on profitability of an organisation. As it will help
them by providing different benefits such as market diversification, tax incentives, preferential
tariffs, lower labour costs and subsidies. There are also some advantages of FDI for Romina
economy including evolution of human capital, maximise in employment, economic stimulation
and access to administration skills, expertise as well as technology. These are considered main
advantages which will directly support a company to gain competitive benefits and increase their

profit ration also. Along with this, FDI has positive impact on profitability of business. Some
other benefits of foreign direct investment will be defined as under:
Access to market: According to the Shawn Grimsley, (2019), Foreign direct investment
can be effective and essential way for organisations to enter into Romania. With the help of FDI
company can easily access to their domestic market which will also support an enterprise to
accomplish long term goals and competitive benefits within given time duration.
Access to resources: Foreign direct investment also considers as an effective and useful
way for an organisation to enlarge their business operations or functions in successfully manner.
Therefore, with the help of FDI, business can easily acquire natural resources which will help
them by maximising its profitability ratio.
Reduce cost of production: FDI is a means for company to overcome their production
cost if the labour market is not expansive and regulations or rules are less restrictive in the
Romania.
The ways through which Tesla can overcome the drawbacks of foreign direct investment
According to Bogheanu and State, 2015, there are different drawbacks of foreign direct
investment on profitability of organisation within Romania. Some risk of FDI and ways to
overcome that risk have been determined as under:
FDI stops domestic investment from happening: It is a major drawback of foreign direct
investment which will unfavourably effect on business success and growth of company in
Romania market. Minimum ten percent investment into an international nation is amount of
money that isn't going into home companies. Along with this money comes backs into general
people with foreign direct investment. Therefore, it is biggest drawbacks or risks of FDI which
will impact on enterprise in negative manner. In order to overcome that issue, large number of
employment opportunity is a best option.
Risks from political chance: It is also considered biggest issue of FDI in Romania which
will affect on business activities and functions of company in negative manner. Political issues in
Romania can instantly change in which FDI is riskier for automotive industry. Political changes
in specific nations is highly and negatively impact on profitability of an organisation. As their
hidden cost, currency exchange rate due to changes in the government rules and regulation.

Political changes or variation can also lead to expropriation. As in which government will have
monitor over the property and assets of an organisation.
Therefore, above mentioned risk of FDI is highly and negatively influence on
profitability of Tesla. There are some ways suggested to the Tesla about how to overcome the
impact of (FDI stops domestic investment from happening and Risks from political chance) over
business success.
Provide employment opportunities to community: This refers as an useful and effective
way which will help an organisation to overcome impact related with FDI stops domestic
investment from happening. Increment in employment opportunities help in development of
country's economy and it will also assist them by increasing living standard of people within
Romania.
Proper study about government's rules and regulation: It is also considered as an
effective and essential way for organisation to overcome Risks from political chance and gain
competitive advantages within given time duration. For this, Tesla should do proper study about
rules and regulations governed by government.

Methodology
Introduction
Research methodology is useful process followed by investigator to accumulate reinvent
and appropriate data about the topic. For this section, research onion is considered one of the best
frameworks which will support a researcher to perform each activities of project in systematic
manner (Costache and Niculae, 2016). This framework has two layers, including inner and outer.
Both layers have different methods related to the primary and secondary which will help a
researcher to collect information regarding the role of foreign direct investment on profitability
of an organisation in Romania. There are different approaches and methods to secondary and
primary research, some are determined as under:
Research philosophy
It is considered as a first part of research onion framework used by researcher in
evaluating information effectively which will further outputs in arriving appropriate conclusion
for the study. There are essentially two form of research philosophy such as positivism and
interpretivisim (Dyreng and et. al., 2015). For this project, positivism philosophy will be used
because it is more suitable and help in arriving valid conclusion. On the other hand, there is
interpretivisim philosophy which is not accurate and suitable for executing each activities of
research in systematically.
Justification: Main reason about choosing positivism philosophy as it will a researcher to
gather reliable information about the topic. This philosophy also essential and useful by an
investigator by driving valid conclusion towards the research. This philosophy is mainly based
on questionnaire which support researcher by providing reliable and authenticated information
regrading the foreign direct investment and its impact on profit and in Romania.
Research Approach:
Research approach is another section of research project which give an accurate direction
over which a research should be performed in order to accomplish desired output. Research
approach basically divided into two section i.e. deductive and inductive (Bradshaw, 2017). In
this report, inductive approach will be applied because it helps a researcher in collecting data
from useful sources that support in valid conclusion and recommendation. On the other side,

deductive approach is not used for this study, because in which learner do not take part in the
creation of valid conclusion or generalization.
Justification: Inductive approach will be used for this research project as it will help
them to accumulate reliable as well as accurate information regarding the study. There are some
advantages of inductive approach such as gamut of probabilities, fuels further exploration and so
on.
Research Strategy
Various kind of research strategy are available such as observation, case study, survey,
questionnaire etc. These are considered as a main type of strategies which will help an
investigator to collect data about the topic (Janský and Palanský, 2018). For this report, case
study will be used by researcher as it assists them by providing in-depth and detail information
about the topic.
Justification: Case studies are more useful and flexible than many other forms of
investigation and allow the investigator to explore and discover as the research develops. It
emphasizes in-depth and accurate content. An investigator is capable to create deep and apply a
different varieties of data sources to acquire a complete picture.
Research Choice:
There are fundamentally two type of research which is qualitative and quantitative. In
case of qualitative research, there is more focus towards collecting data in theoretical way where
it handles with human discernment and sentiment. On the other hand, under qualitative method,
it mainly emphasis over collecting the data in order to create information or data more
explanatory and clearer to reader and create better understanding among them with the support of
theoretical aspects (Islam, 2015).
Justification: Therefore, both type of research are effective but as per the study,
qualitative type of investigation will be selected because it help in collecting quality and accurate
data about the topic. Quantitative research is not useful according to the study, because it require
information in form of numbers and facts which is difficult for doing research in systematic
manner.
Research design: This is identified as an essential section of research methodology
which emphasis towards analysing the research design. All activity of research project is must be
depending of research design which will support in directing the tasks executed within the

research in right way (Ciocoiu and et. al., 2013). This section of research is mainly classified into
three parts such as experimental, descriptive and exploratory. These kinds of research design are
more important but as per the study, descriptive design will be used because it assists in
presenting the data in detailed and accurate manner.
Justification: Descriptive design used for this project because it is effective for a
researcher to analyse non-quantified issues and topics. In this researcher have possibility to
observe the concept in an unchanged natural environment and completely natural.
Techniques and procedures of data collection:
There are fundamentally two kinds of data sources used by researcher to gather primary
and secondary data regarding the study. For collecting primary data, questionnaire will be used
because it helps a researcher to collect reliable and valid information about the impact of foreign
direct investment (Jude and Silaghi, 2016). On the other side, for gathering secondary data,
books, journals, magazines, publication research and many other articles relevant to the topic
will be applied. Thus, all these type of data sources are essential for an investigator to perform
each activities of research in more reliable and effective manner.
There are different kind of data collection techniques such as observation, interview,
questionnaire, modelling, case study etc. All these techniques are important but according to the
topic, questionnaire will be used by researcher. As it will help an investigator to gather reliable
and accurate information about the topic. In order to present data about the topic, there are
certain type of presentation techniques such as bar chart, pie chart, tables, line chart and many
other graphs will be applied. All these techniques will support a researcher to easily present
information or data to the respondents.
Sampling techniques
It is a best part of research methodology where there is an accurate description about the
number of populations chosen to collect data regarding the specific topic. In this research, there
are mainly two types of sampling methods via which sample size is chosen which present entire
population, these are non-probabilistic and probabilistic (Kragulj and Parezanin, 2015). For this
research project, probabilistic sampling will be applied because it assists an investigator in
ignoring any sort of bias task. With the help of this method, 60 employees as a part of total
population will be selected for research. On the other side, non-probabilistic method of sampling
is not used for this project because it is not easy to make valid inference regarding the whole

population because the sample chosen is not representative. resent information and complete
research in more effective and systematic manner.
Data collection and Analysis:
In order to present valid conclusion and findings of research, it is most important to
analyse as well as interpret the data gathered. In order to do primary and secondary data
collection technique has been applied. For analysing the information collected by investigator,
thematic analysis will be applied because it assists a researcher in presenting summary of the
concept which has been described throughout the analysis (Lucke and Eichler, 2016). Thus, it is
a best techniques of data analysis which will support in giving an accurate knowledge to the
reader about the subject which is elaborated below in specific theme.
Access Negotiations
` It is also considered as a best and useful method for performing primary and secondary
research systematically. For doing primary research, researcher have access for questionnaire
instrument. On the other side, for performing secondary research, an investigator has access to
use books, journals, articles and many other scholarly papers.
Research reliability and validity: For this research methodology, questionnaire will be
more appropriate because it give valid and reliable data about the study (Kurečić, Luburić and
Šimović, 2015). It is the best technique for accumulating primary and secondary data in more
reliable and valid manner.
In order to conduct primary and secondary research, number of methods will be applied
by researcher such as cost, ethical consideration, access etc. All these are most significant and
useful methods which will be applied for performing each activities of research in systematic
manner. Therefore, these methods will be assisting an investigator to accumulate primary and
secondary information about the topic.
Ethical issue:
While conduction of research activity, it is very important for an investigator to execute
its work or task in more ethical and reliable way. For this, investigator must emphasis toward
accumulating accurate data from authenticated resources only and must ignore any type of
manipulation or influence in the collecting data to make individual research more effective and
attractive. In addition, investigator must not communicate the personal data of participants those