122k views
1 vote
An American business wants to enter a foreign market. Which of the following is most likely to be at the top of the list of political issues concerning the business?

1) the existence of voluntary export restrictions
2) the practice of acculturation
3) the presence of nongovernmental organizations
4) the existence of cyberterrorism
5) the instability of prevailing government policies

1 Answer

7 votes

Final answer:

The instability of prevailing government policies is the political issue most likely to concern an American business looking to enter a foreign market, as it creates an unpredictable environment that affects investment decisions and can impact costs and strategy. Other considerations include cyberterrorism, voluntary export restrictions, environmental laws, and dependence on crucial imports like oil.

Step-by-step explanation:

When an American business is considering entering a foreign market, it must take into account various political issues that could impact its operation. Among the concerns listed, the instability of prevailing government policies is likely to be at the top of the political issues concerning the business. Such instability can create an unpredictable environment that affects foreign trade and investment decisions. Companies often seek stable environments in which rules and regulations are clear, consistent, and unlikely to change unexpectedly. Government instability can manifest in sudden changes in trade policies, tariffs, regulations, and legal systems, all of which can affect business operations, costs, and strategy. Therefore, the potential volatility of a country's political landscape is critically examined before a business decides to invest in or trade with that country. Companies may also pay close attention to other issues like the possibility of cyberterrorism and how it could threaten their digital infrastructure, and they may weigh the existence of voluntary export restrictions that might limit trade. Furthermore, market entry can be influenced by issues such as the possible circumvention of environmental protection laws in host countries which could lead to reputational damage or backlash from consumers and environmentalist groups. Dependence on crucial imported products, like oil, is also a factor to consider as it might raise national security concerns for the business's home country. Taking these risks into account helps a business make informed decisions about foreign market entry.

User SAE
by
7.9k points

No related questions found