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Write 3 page essay on the topic Business Communications: Writing Assignment #1.Although the economic systems are different globally and it includes centrally planned economy, market economy, countries
Write 3 page essay on the topic Business Communications: Writing Assignment #1.
Although the economic systems are different globally and it includes centrally planned economy, market economy, countries that lean more toward liberalization of the market have been shown to be operating better. The economic environment of any country fluctuates regularly and it is wise to invest when it is favorable.
The firm must also look at the economic stability of the country before it makes any decision to invest there. Stability means several things. One of them is the rate of inflation. Inflation is an overall increase in prices without a replicating increase in productivity. . Governments can sometimes be unable to manage the rate of inflation by using monetary policy and other times they may go to the extreme through printing too much currency, which only increases the inflationary pressures (Ip 24). Such stability issues affects the investment decision since it may end being very expensive or cheap to invest in a chosen country especially where it involves to make decision which will require a huge capital outlay.
It is also vital to note that the political environment may make it hard for companies to work without problems in these countries due to damaging publicity and impact brought about by people in the top power making organs of the government. A business cannot effectively do business to its full potential in order to make profit in such an unworkable or ungovernable countrys political upheavals (Grey 56). A new and hard to deal with government may replace either democratically or undemocratically the friendly government, and hence come up with hostile policies towards foreign owned entities like expropriating foreign assets or forceful sale of stake to locals. Political environment in the selected country favors foreign investment, since the people elected the government in place fairly. This means, there is no possibility of violence that disrupt the operation of the
