Question

Overseas Expansion (Scenario)

Whittaker Semiconductors has recently decided to expand its operations overseas. Amanda Quan, Vice President of International Business, assigned a team of investigators to analyze the risks faced by the company in making this move. Of particular interest were the risks that might affect the success of a new production plant to be located in one of three potential countries.

LeShaun Golding researched the risks linked to establishing the plant in Country B. He cited government intervention, lack of local managerial talent, and unethical business practices as the most prominent risks for this location. LeShaun noted all of the following types of risks EXCEPT ________.

a) Government intervention
b) Lack of local managerial talent
c) Unethical business practices
d) Currency exchange rate fluctuations

Answer 1

LeShaun Golding's research on risks for Whittaker Semiconductors' potential plant in Country B included government intervention, a lack of local managerial talent, and unethical business practices, but he did not mention currency exchange rate fluctuations as a risk.

Step-by-step explanation:

In the scenario involving Whittaker Semiconductors' overseas expansion, LeShaun Golding researched risks associated with establishing a plant in Country B. He identified government intervention, lack of local managerial talent, and unethical business practices as prominent risks but did not mention currency exchange rate fluctuations. The list of risks does not include currency exchange rate fluctuations, making this the correct answer to fill in the blank.

When companies like Whittaker Semiconductors consider international expansion, they assess various factors, such as labor costs, proximity to suppliers and customers, quality of infrastructure, level of taxation, and local government competence. The cost of environmental regulations is also considered, although it typically represents only a small percentage of overall costs. Hence, these other factors are generally more important to firms than narrowly focusing on environmental regulation costs.