The rate at which innovation and technological advancements are increasing is a major factor that contributes to the collaboration and competition amongst companies. Organizations are coming up with a new business idea and implementation every single day. Although generating new ideas in the business field is a great idea this does not guarantee great returns and trading position in the market because there exist so many organizations in the global market offering the same products and services, hence increased competition. The global economies keep changing with time due to different factors which include: nation political factors, cultural factors, and social factors. Due to the economic status of various countries, companies are developing and expanding their businesses to other nations in search of profit maximizations. When faced with such situation organizations have to make a decision on which country they should invest in successfully and will generate a huge profit for them. The managers have to critically analyze the country risks on investments and their management of crises. In this paper, we will discuss the analysis made by the shareholders and senior partners of Tower associates which involved four countries before making their decision on which country will give them the best conditions to expand the organization. The following aspects were analyzed:
Are there any hidden assumptions or price rigidities in
the countries?
Hidden assumptions in the country’s economy influence the truth revealed about the economic state of a nation. The rigidities hidden affect the health of the economy by influencing the labor level and wages paid to the workers. Employees’ wages in a country are used to define the growth of the economy, thus most wages are not paid as stated in the market economy. Claims state that some countries have not illustrated the country’s political climate in detail and therefore it’s hard to determine the country’s influence on direct foreign investment from other countries (Baek and Qian, 2011). The competition status of the country has not been analyzed, thus it’s difficult to determine economic growth patterns. Competition has both positive and negative impacts on the economy; the country should constantly analyze the pattern of changes in competition in the country to provide the information to the interested local and foreign investors with a clear picture of how the economy is performing. With this information its easier for the investors to make possible and clear predictions of the country trade market. While going through different countries’ documentation we realized that the taxation information was not provided. The taxation terms are crucial to the operation of the business and therefore the Towers firm needs this information to establish if they will invest or not (Vij and Kapoor, 2007). The influence of the government regulatory control in the company is hidden, thus hard to establish to which extent wills the government influences the organization’s operations. In conclusion, a company needs to research concerning the country risks causes and management in the country before investing. The analysis will enable the organization to avoid poor investments. Additionally, nations need to provide their taxation terms and level of government involvement in the business openly; this will encourage investments in the country.