Firms must consider several important issues when considering the location of its various production facilities. These issues can be categorised into four main groups. Firstly, a firm must consider issues that are country related. These include the political, economic, and legal systems of a country, the culture differences, the availability and cost of resources, the host country’s infrastructure, and the country of origin effect. (MacCormack, Newman, Rosenfield. 1994, pp69-80)

The political system of a nation is an important issue to consider when looking to base production facilities. The firm must consider the amount of political r

Firms must also consider their ethical stance on issues such as the routine violation of human rights and environmental issues. Firms must decide whether to invest in a country that does not uphold these basic rights. The firm must weigh the costs and benefits of locating in that country and determine the best action. The firm may face negative publicity if they decide to invest. (Kapstein, 2001, p105)

Kapstein, E. (2001) “The Corporate Ethics Crusade”, Foreign Affairs, Sept/Oct, p105

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