write an essay on organizations that make the decision of making the investment in the foreign countries.
In the recent years, there are increased organizations that make the decision of making the investment in the foreign countries. But after taking such decision, they soon make the realization that it can be a risky one unless considered carefully. Several factors are to be considered before making the investment in the foreign countries. The primary factor is the nature of the foreign countries that are to be considered. The political, legal and the social factors are different in every other country. Such conditions are to discuss in details (Bjorvatn &Soreide 2014).
The competitiveness between the countries is considered as a factor that is critical in making the decisions of the multinational organizations to make the investments in the other countries. The decisions regarding the factor of locating the resources are of immense importance. For making the decisions of locating the resources, the understanding of the pattern of direct investment of the foreign countries is to be done carefully. The World Economic Forum gives the definition of the term competitiveness. The term is defined as the collection of policies, institutions and factors that are used for the determination of the productivity level of any country. The forum every year makes the publication of its global competitiveness index. In that index, the forum ranks all the countries in accordance with the twelve factors that are considered as the key components of modern competition (Budde-Sung 2013).
The factors that are consideration makes the inclusion of the framework of the institution in which the selection of the business is done, the infrastructure level, health, education and economic stability. It also makes the inclusion of the training, size, sophistication and efficiency of the markets, business development state and the innovation ability.
The factors of infrastructure, institution, heath of public and the education in the primary sense are regarded as the primary requirements for the economies that are factor-driven. The economies that are driven by efficiency have lead to the development of greater markets that are sophisticated. Such markets are advanced technologically and involve higher education and training of the standards of international business. The greatest competitive economy is that economy that is driven by innovation and such economy have also made the development of the forms of sophisticated service (Cosmin et al. 2014). In these economies, the role of government is of immense importance. It is because the government is regarded as the basic drivers of development and success of the international business. The Government also is the primary drivers of the competitiveness of any country.
In every country, there has been a vast political change in the last twenty years. Such change is significant in China. China made the identification of the need to build a relationship between the political ideas of the country and the requirement of the country to find the investors for the projects of the country. The nationalization that took place in the Gas Industry of Bolivia serves as the strong example of the way a political decision changes the rules of business in the country (Rugman & Collinson 2012).
Bjorvatn, K. &Soreide, T. (2014) ‘Corruption and competition for resources’, International Tax and Public Finance, 21 (6), pp.997-1011.
Budde-Sung, A.(2013) ‘The invisible meets the intangible: culture’s impact on intellectual property protection’,Journal of Business Ethics, 117 (2), pp.345-359.
Cosmin, T., Nitu, C.V. &Nitu, O. (2014) ‘Economic barriers and competitive environment – some considerations’, Economics, Management and Financial Markets, 9 (1), pp.311-317.
Rugman, A. &Collinson, S. (2012) International business [Online]. New York: Pearson. (Accessed 12 January 2015).