Star Volans Inc. is planning on expanding its business globally. In te

QUESTION

Star Volans Inc. is planning on expanding its business globally. In terms of the costs involved in conducting business in a country, it will be most economical for the company if it chooses a country:

A. with a closed totalitarian political system.

B. where the company will have to provide its own infrastructure and supporting business.

C. where laws regarding product safety, safety in the workplace, and environmental pollution are extremely stringent.

D. where politicians are held accountable by the electorate.

E. with no local laws to protect intellectual property.

ANSWER

D
With regard to political factors, a company may have to pay off politically powerful entities in a country before the government allows it to do business there. The need to pay what are essentially bribes is greater in closed totalitarian states than in open democratic societies where politicians are held accountable by the electorate.