Final answer:
The managers at Garcia Manufacturing should consider various factors when deciding on an alliance, such as costs, supplier and customer proximity, infrastructure quality, taxation levels, and local government reputation. Environmental regulations, while a concern, typically represent a minimal part of the costs involved.
Step-by-step explanation:
The managers at Garcia Manufacturing are considering two alliance options: partnering with a domestic company or a company in another country. When making this decision, it's critical to consider a variety of research findings. Environmental regulations can be a concern, but they typically only account for 1 to 2% of the costs of a large industrial plant. Therefore, this cost may not be the most significant factor. Instead, aspects such as labor and financial capital costs, proximity to reliable suppliers and customers, infrastructure for transportation and communications, the level of taxes, and the local government's competence and honesty play a more significant role.
It is also important to note that evading environmental protection laws by relocating to countries with lax pollution standards is a concern for some environmentalists. Additionally, politicians might worry about becoming too dependent on imported goods, potentially affecting national security. These anxieties may lead governments to enforce trade restrictions to protect national interests. However, for companies like Garcia Manufacturing, the decision to form an alliance may be more influenced by strategic business considerations rather than only regulatory concerns.