Decision Making That Permits Influence An Investment Abroad

2179 Words9 Pages
INTRODUCTION: The world is changing more rapidly; consequently organizations are promptly the way they operate as well to ensure survival and growth in high velocity turbulent markets. To succeed an organization has to anticipate, react and even lead in terms of strategic decisions to enhance profits. It is pertinent to understand that a series of systematic decisions is undertaken before an investment abroad is carried on with. According to Sundaram & Stewart 1992 there is a "system of decision making that permits influence" which refers to the firm 's ability to coordinate and control endogenous organizational variables and quasi-endogenous market variables (coupled with exogenous factors (e.g exchange rates, regulations, tariffs and political set up). Investment decisions are critical for the performance of an organization. From a micro perspective, they are fundamental for the growth of individual companies, increasing their efficiency by reducing per unit costs, enhancing profits by tapping new market segments and exploiting more resources. At a company’s level, an investment decision abroad is much more complicated and requires more research; it is more of a multi-criteria process taking into account numerous factors. These are primarily economic and risk factors, political and social environment and government regulations. Naturally, the effects of these factors on decisions of individual companies may vary significantly. Each of the risk has been separately defined
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