As with doing business in any country, it is imperative to fully understand
the political, technological, legal, and environmental landscapes of the
country. By gathering information on past and present situations,
companies can make educated decisions about how they can successfully operate
in a foreign country in the future. Many companies grow into global
companies to create economies of scale as well as economies of scope.
In creating economies of scope, it is important to realize what a given
country has to offer that differentiates it from other countries.
This in turn will determine the type of operation established as well as
the size of investment made in a foreign operation.
The United States has the most politically stable government in the world. The U.S. government welcomes investment by foreign companies and places few restrictions on investment other than those which could jeopardize national security. The government is fair with foreign investors and is not known to take over foreign investments once they are up and running. In fact, the U.S. government is a member of the World Intellectual Property Organization which attempts to protect proprietary information. This is quite important to companies attempting to bring new technology to a foreign country. Along with political stability the American economy is the most stable in the world. In fact the United States is known as the "land of opportunity." The legal environment of the United States protects employee rights, but does not protect non performers. While employers are not forced to be loyal to employees, employees are typically loyal only to themselves. The law also enforces contracts making it possible for terms and conditions to be spelled out and adhered to. Finally, while America has a highly technological labor pool, the labor is not cheap. While this high cost of labor may be acceptable to a highly technological production process, this is a deterrent to building simple manufacturing plants. America has begun its transition from manufacturing to service.
Upon reviewing the P.E.L.T. of the United States, it can be realized that it is safe to make large investments in operations without the fear of government intrusion or the inability to enforce contracts. Again, as stated above America is known as the "land of opportunity" where everyone can achieve the "American dream." While small companies are said to drive the economy in America, there is definitely room for global operations. This is especially true due to the spending power of American consumers. The two main reasons to do business elsewhere and export only from another country to the United States are to gain tax incentives and utilize cheap labor.
CIA - World Factbook - United States
Scarborough, Jack. The Origins of Cultural Differences and Their Impact on Management.Quorum Books 2001. p216.