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Finance & Accounting
Pages 8 (2008 words)
The Ruritanian Project Introduction After the generation of a promising idea and recognition of the plan to enter into another country, environmental scanning becomes the next important step that helps in revealing the prospective threats, opportunities, weaknesses and strengths for the business enterprise…
Organizations can choose to conduct environmental scanning of varying level such as, multinational, regional and national. In case of multinational, a wide range of aspects are assessed to identify, forecast and monitor the trends. These trends include the political and economic trends of the countries (Deresky, 2006; Lall and Sahai, 2008). In this case, the company, which is headquartered at United Kingdom, is planning to open its new manufacturing unit in Ruritania. Ruritania is a developing Eastern European country with a stable political and economic condition. This report focuses on providing an analysis of the impact on financial aspect of the organization owing to its operation in this country. The analysis is based on the data provided in the case. Figure 1: Environmental forces affecting the organization (Source: Kerin, Hartley and Rudelius, 2010) Market growth For Foreign Direct Investment, decision making of the multinational enterprise in the host country, market size, per capita income, degree of development and changes of market growth, play an important role. The host countries with higher degree of economic development, increasing market size and rapid economic growth are seen to provide better opportunities to the MNEs to exploit the ownership advantages and accomplish economies of scale. ...
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