16PROPOSAL AND PROJECT Essay Example

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    Business
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    Masters
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16PROPOSAL AND PROJECT

Proposal and Project

Table of contents

Abstract 3

Chapter one: introduction 3

Background information 3

Statement of the problem 3

General objective 4

Specific objective 4

Research question 4

Scope of the study 4

Significance of the study 4

Chapter two: literature review 4

Overview of literature 5

Chapter three: research methodology 5

Research design 6

Working hypothesis 6

Definition and measurement of variables 6

Study area and the targeted population 6

Sampling techniques and sample size 7

Data type and sources 7

Data analysis 7

References 8

Abstract

Over the past few years, the steady rising of the growth of china economy has faced a keen look by most of the investors in a global perspective. Many foreign firms have thus opted to operate oversees particularly in china. The cheap labor available in china has attracted more foreign investment from all over the globe. China has America as its main business partner. China operates a fixed rate of exchange and has the largest foreign reserve in its banking system. The foreign firms are thus shifting their attention and are weighing options to invest in china as the profitability index associated with such investment is so high. It is for this reason that the UAE firms have entered in this market. One of the largest UAE firm known as the Abu Dhabi Commercial Bank is therefore weighing option to enter this market and benefits from the same. The research is therefore going to explore the possibility and the validity of investing abroad and in particular, China.

Chapter one: introduction

Background information

Abu Dhabi Commercial Bank is one of the most top ranked firms in the UAE that operates the business in terms of financial management, investment in foreign exchange and as a merchant. The bank has a strong financial base with the Abu Dhabi government owning 65 percent of the shares and the rest is owned by the private individual and institutions. The bank operates both locally and globally in both in India have a total number of 48 branches in the UAE and 3 other branches outside the UAE Tait, 1988, p.176). The bank also renders such services such as commercial, brokerages as well as retail services. The bank is also considering opening a fourth foreign branch in China as China has been earmarked as a growing economy which can support the services of this banks hence profitable. It is upon this proposal that tis paper will help justify the validity to open a branch in china.

Statement of the problem

Despite the fact that the ABCB, is currently operating a total of 48 local branches in the UAE, and three other foreign branches, the bank still need to expand its coverage outside the UAE as it has found that the foreign branches have become more beneficial due to the better economies that provide an effective demand for their services and the products. The bank has since identified Chinese economy as one of the best economies endowed with the highest world population over 1.3 billion which is promising to offer the needed demand for such services. This paper hence will answer the validity of the statement on whether the bank should open an oversee branch in China Zinzius, 2004, p.167). In their proposal the ADBC also has noted that there is a weak banking system and that this can undermine the Chinese future economy. The weak banking system will actually form the bigger part of this research as this is where the ADCB is best specialized. These problems have since been acknowledged by the Chinese government have thus decided to amicably address them via increased consumer expenditure.

General objective

To determine the economic validity of China to offer effective demand for the ADCB services to open an oversee branch in China.

Specific objective

To establish the current state of the banking systems in China

To determine the economic profitability of ADCB opening a branch in Chinese banking industry

To determine the challenges that ADCB will face as a result of venturing into Chinese banking industry.

Research question

  1. What is the current state of the banking systems in China?

  2. What benefits will accrue to the ADBC as a resulting of operating in China?

  3. What are the challenges that will face ADBC as a result of opening a branch in China?

Scope of the study

The paper will explore the available evidences to shed light on the whether it would profitable for the ADBC to open another fourth branch oversees and in specific to China. The paper will use china economy as the basis of collecting such information in order to come up with the rational decision in order to for the ADBC to start its operations in China. The available data will thus help the firm to make an investment decision to start its operation.

Significance of the study

The ADBC being an investment, commercial, merchant and also a brokerage firm, it is of great significance for management to increase their market share globally. This will be done via the need to open new branches on countries that have better economies which are strong enough to offer a constant effective demand (Zinzius, 2004, p. 123). China having earmarked as a strong economy which can support the services rendered by the ADCB, it would be beneficial to conduct a research to come up with the real picture on ground and analyze the data to aid in making the decision rational enough to start the operation.

Chapter two: literature review

According to Nicholas Hope and Fried Hu, the Chinese financial problem and in particular, the banking sector is clearly known. The reformation era that began in 1978 has seen a constant and steady increase in the management of the financial and the banking system but there has been a persistent challenge m merged with a lot of financial problem. The financial system suffers from the underdevelopment and the imbalance. The poor performance of the banking system has posed major setbacks in the security markets with the large GDP recorded in china. Financial system dominate the banking system and this made most of the bank declared bankrupts as they lend money to the firms but due to poor banking system management such loans are not being repaired. The revelation by the two also identified that the financial and capital markets are being controlled by the state corporations and this does not help the banks to grow well.

This research done by two also revealed that the poor performance of the banking and the financial systems are because under support offered to such sectors. The rating agencies, the legal system, and the information technology sectors that are supposed to give the necessary support to such bank are not performing (International Business Publications, USA, 2012, p.12). The legal system has thus failed the banks in such issues such contracts enforcement, adequate standards of disclosure and the collateral collection and recovery. This lack of such significance support has impacted negatively to the development of the banking system. The banking system was also revealed to be inefficient and is overstaffed (Sanderson & Forsythe, 2013, p.324). There is also a problem of high operation costs arising from the extensive bank branches. The banks are also seen to involve in issuance of market securities without properly assessing the credit worthiness of those given the securities and the loanees.

This research therefore appreciated the need for the reformation of the banking system in China. This was to be facilitated by the welcoming of the foreign investment and which could mutually form a partnership with domestic banks to help reform solve this phenomena. The china government focuses their attention to seek on new ways of developing their financial system.

The Chinese government has since allowed the foreign banks to come in and operates or to be in partnership with domestically run banks. In so doing, the government has since changed the policies that were seen to be derailing the progress; this was achieved by the year 2004 according to this research

Overview of literature

The literature as suggested by the Nicholas Hope and Fried Hu in essence has is in full support of the current need by the ADCB to open a branch in China. The reformation that have done suggest that it will be of greater beneficial for this bank to operate in a global coverage and particular in china. The summary of the above literature reviewed has in essence given the ADCB, a green line to operate in the this country

Chapter three: research methodology

In this chapter, various research methods that will be used are to be determined. The sampling techniques and how the data will be analyzed will also be revealed. It is therefore a chapter that gives an account of what is expected and the research validity is basically based on it.

Research design

The target of the research is to give reasonable and accurate finding that will go down to help the bank we decide on whether to expand its branches oversees. The collection of the firsthand information via the primary data will be incorporated with the already published information and analyzed. The primary data will be collected via the use of survey interviews for the concerned stakeholders and observation will also be used to help acquire the necessary dat. Secondary data will be collected via such methods of appreciating the earlier data on the already done researches and other record possible from ,the banking system and the world bank.

Working hypothesis

  • The current state of the Chinese banking sector is favorable for ACBC

  • Abu Dhabi commercial bank will benefit as a result of venturing into international market

  • There are several challenges that ADBC will face as a result of venturing into Chinese Banking industry.

  • Decentralization of firms branches oversees has contributed to a large capital base for globally operating firms.

Definition and measurement of variables

The determination of whether to open another oversee bank branch in china by the ADCB will involve the use of the following variables.

  1. The number of banks that are locally operating in the Chinese economies, X1

  2. The number of other firms rendering similar services done by the ADCB, X2 but not necessarily banking system.

  1. The rate of government involvement in the banking sector of the Chinese economies, x3

Other factors that are related to the banking system in china will also be considered. Such factors will include the constraints the rate of awareness among the population of china on the need to save in banks and also the participation in the foreign exchange market, the restriction on the rates of interest charged and paid in the banking system. The level of the employment rate and the wage rate will also be looked at.

Study area and the targeted population

This study will be focus majorly on the banking system. Twenty (20) different respondents will be required to undertake the survey to give the required information. These will include 9 management officers as follows; the C.E.O of the Abu Dhabi Commercial bank, human resource manager, the chief financial officer, retail banking manager, chief operations officer, wealth management officer, information and technology manager and international relations manager. In addition to the management, the survey will gather information from 6 middle staff employees from the bank. A total of 5 survey forms will be sent to government officials in the UAE banking industry to acquire information about the current status of UAE banking sector. It is worth noting that in-depth survey forms will be used to obtain the primary information about the current status of ADCB and the UAE banking sector; while secondary data will be used to obtain information about the Chinese banking industry. The secondary data will be obtained from Chinese banking industry annual reports , the World Bank , the World Trade Organization and the ministry of trade of UAE (to obtain the trading relationship between UAE and China).

Sampling techniques and sample size

Simple random sampling will be used to determine the respondents used in the survey. This will give each variable under study ample time and similar resources to aid come up with unbiased information. The sample size of the survey is 20 respondents for primary data coupled with secondary data.

Data type and sources

The research will first involve the collection and analysis of the primary data. The secondary data from the published sources will also be collected and analyzed. The comparison of the two will aid to draw a rational conclusion on whether to implement the report on not.

Data analysis

As mentioned above, most data that will be used in this study will be secondary data. The secondary data will constitute the quantitative part of the data. However, a survey questionnaire will be used to obtain qualitative data. The qualitative data will analyzed by drawing patterns from the insights from the respondents.

Research plan

16PROPOSAL AND PROJECT

Timeline for the study

The entire study is estimated to take a maximum of 26 weeks

activity

Passing gatekeeper

Obtaining ethical clearance

Obtaining relevant secondary data

Pilot study

Drawing main sample

Distribute main study

Follow-up reminder to non-returning respondents

Obtaining Quantitative data

Qualitative interview

Interview transcription and checking field notes transcription

Analysis of qualitative interviews and contextual field notes

Integrate results, create relevant data displays

Final research report

References

Arfat, F. (2012). Abu Dhabi Commercial Bank. Business Administration & Research Articles Journal of Pakistan, 21-23.

http://articles.mypage.pk/2012/12/fwd-abu-dhabi-commercial-bank-risk.html

Bloomberg. (2010). Abu Dhabi Commercial Bank seeks to diversify lending. Arabian Business.com, 71-73.

http://www.arabianbusiness.com/abu-dhabi-commercial-bank-seeks-diversify-lending-357490.html

Fund, I. M. (2007). United Arab Emirates. Washington: International Monetary Fund.
http://www.worldcat.org/title/united-arab-emirates/oclc/870597792

International Business Publications, USA. (2012). Oman Country Study Guide: Strategic Information and Developments. Intl Business Pubns USA

Low, L. (2012). Abu Dhabi’s vision 2030: An ongoing journey of economic development. Singapore: World Scientific

Oxford Business Group. (2007). The Report: Abu Dhabi 2007. London: Oxford Business Group.
http://www.worldcat.org/title/report-abu-dhabi-2007/oclc/782129618

Ravenhall, J., & Noble, G. W. (2000). The Asian financial crisis and the architecture of global finance. Oakleigh, Vic: Cambridge University Press.

Sanderson, H., & Forsythe, M. (2013). China’s superbank: Debt, oil and influence : how China Development Bank is rewriting the rules of finance. Hoboken, N.J: Wiley

Tait, A. A. (1988). Value-added tax: International practice and problems. Washington, D.C: International Monetary Fund.

Zinzius, B. (2004). Red capitalism: The fragile financial foundation of China’s extraordinary rise. Singapore: Wiley.

Zinzius, B. (2004). Doing business in the new China: A handbook and guide. Westport, CT: Praeger.

Appendix 1:

The organization structure of Abu Dhabi Commercial bank

16PROPOSAL AND PROJECT 1