As indicated in the case, it is manifest that the financial crisis of 2008 placed a heavy burden on

local and international markets. As a result, it negatively affected multinational companies'

ability to raise funds and fulfill their financial obligations. According to Hill & Hult (2018), several
banks, including the Lehman brothers, which were considered financially stable and impossible
to go, underwent bankruptcy and collapsed. We further identify from the text that the cross-
border flows peaked to 11.8 trillion dollars in the year 2007 rapidly reduced to less than 6.2
trillion dollars by 2014, signifying that the global market was in retreat. As a result, European
economies faced deflation due to the decline in the value of assets, which impacted
commodities' pricing value.

The peaking of the cross border flows from the year 1980 from as low as 0.5 trillion dollars to
the high of 11.8 trillion dollars in 2007, saw financial institutions and multinational corporations
characterized by good lending abilities. Moreover, globally operating firms capitalized on
foreign direct investment flows and purchases of equities and bonds, which broadly embrace
integrated capital markets into one single massive global system. Then came the 2008 crisis
that saw the value of the mortgage-backed securities that the multinational firms and financial
institutions held collapse. Housing prices fell, leading to a rise in default rates on mortgages.
The lenders had written risky mortgages bundled into securities and then sold them to financial
institutions that used them to value their derivatives. With write-offs, this spelled doom to
these corporations and financial institutions. With this in mind, we realize that the financial
system is susceptible to risks and failures, leading to both local and international bankers not
wanting to lend capital to businesses or even individuals. Therefore, multinational firms can
implement specific solutions discussed below to limit or cushion themselves from the effects of
future crises.

The most important action that a multinational firm can take to limit the impact of future crises
in the global financial system is to be prepared and become more informed. History is ridden
with historical trends regarding the worldwide capital market and the financial system with
information and solutions about needs, risks, interest rates, exchange rates, creditworthiness,
and so on. Multinationals can use such information to make decisions on what to invest on, the
amount to lend and what to charge borrowers, interests paid to depositors, and the risks
surrounding values of financial assets under their portfolios, including corporate bonds,
government securities, stocks, and currencies (Hill & Hult, 2018, p. 618). It is worth noting that
the acquisition of information is considered imperative for business. However, having quality
and accurate information is worth more. By taking this into account, Multinational firms can be
better prepared to handle certain unreported financial disclosures and ensure transparency and
cushion the firm from upcoming risks or crises. Furthermore, a multinational firm's ability to
pinpoint financial problems ahead of time may offer the necessary time to come up with long-
term solutions to address the issue.

The second action that multinational firms can take to limit the impact of future crises is to
formulate financial arrangements or establish capital budgeting plans. These two activities
would help minimize the impact and risk of another problem. At the same time, it would
provide the necessary functions such as fiscal sustainability, risk management, and significant
public investment. Firms require capital to maintain an operating budget and also pay salaries
and bills. Therefore, multinational firms should focus on strategic planning in terms of fiscal
budgeting plans, which directly affect the corporation's facilities, operations, and infrastructure.
A reliable capital financing plan based on resources needs assessment of the firm can provide a
stabilized environment in a financial crisis that would have paralyzed operations. The
underscored case points out the most crucial lesson learned from the 2008 financial crisis, such
as the Lehman Brothers and other financial institutions that appeared healthy on paper but was
ravaged to the ground by disruptions in the flow of money in the global economy. in the

The third solution for the firm to ensure stability in the event of a global crisis is to ensure
borrowed funds debt) is used appropriately. Having a knowledgeable team and financial
experts in the firm who can balance in a responsible way the firm's financial need with the
ability to obtain financing can help ensure the firm's continuity in terms of the flow of capital to
ensure the company will not have a low purchasing power during future financial crises.
Additionally, a multinational firm with a strong balance sheet might be on the safe side of
obtaining more funds as compared to a firm with a negative balance sheet (Keen, 2017).
Furthermore, having sound strategic financial plan in place, ensures the firm has access to
dependable sources of capital even during the times of financial adversity, which will help the
organization to maintain a healthy financial ability rather than waiting until the crisis hits, then
they rush to implement a strategic plan to keep them afloat. To further, reinforce this solution,
the firm needs to decrease loss-making units, do away with unnecessary items, create new
products and goods that have sufficient potential by revamping the production systems and
enhancing productivity and quality. Without a solid marketing strategy, this step will not have
the full impact. According to Hill and Hult (2018 p. 623), the fundamental measure of a firm's
financial health ability is commonly centered around the strategic goals of the firm, their
functional policies, as well as the firm's ability to source, raise and increase funding. Developing
sound debt policies, which consistently march their goals and financial needs provide
confidence that the firm will weather the financial crisis storm.

Another strategy that multinational firms can leverage on is to re-examine their product and
services portfolio if that crisis forces them to evaluate their markets, competitor products,
determine goods with higher sales to enhance consumer attraction and profits Godart, Görg,
and Hanley (2012). Doing this helps the firm not resort to drastic measures such as layoffs or
closing locations as a result of lower sells or demand. Additionally, by focusing on product
diversification and redistribution, in well-researched areas, the firm can ensure their firm makes
profit and recession-proof in the event of a financial crisis. It is important to note though, that
without the proper data and information on the intended markets, they would not be able to
make informed decisions and gain clear insight s of the existing and predicted market prices
and how they can influence these prices using neighboring zones and consumer types (Hill &
Hult, 2018 p. 622). A firm that strives to create a strong brand and a consistent and diversified
product portfolio, can greatly influence consumer awareness and solidify its market position.
This is achievable by compiling past price and volume dynamics statistics that have been
analyzed against past historical data.

Conclusion

In a bid to limit future financial crises, the above solutions can guide multinational firms to
research, create and implement adequate financial arrangements, cut down on loss-making
product lines, revamp potentially profitable product lines and enhance quality and productivity.
By employing a wide range of operations and flexibility to create swift strategic action, the firms
can ensure they withstand future economic crises.

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