Fundamental Decisions and the Nature of Business

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Abstract One of the most fundamental decisions corporate have to make is the choice on location. This is because choice of an ideal location is vital to a firm’s operation capacity in the overall market. The location decision has been given so much attention by businesses and this essay mainly focuses on the factors that spearhead the choices on investing in a particular location. Globally, companies have been influenced by certain factors to invest in different regions not only by just making investments, but, the nature of business has to vary depending on the markets they are targeting. Finally, this study seeks to analyze the factors that foster investment decisions made in regards to investing in certain locations. Keywords: Fundamental decisions, ideal location, nature of business Introduction Location is a comprehensive topic in research since it comprises of many factors. A simple definition of location is a place where one opts to carry out particular operations or activities. The hurdle, however, manifests itself when choosing the ideal location for one to conduct these operations. Most organizations while selecting the appropriate business location tend to do a cost-benefit analysis of different alternatives considered. One of the vital factors to consider is the amount of capital needed to start the operations. For almost all sizable corporations, the evaluation of proposed business site includes a systematic consideration of its cost and benefits relative to the alternatives. This essay seeks to analyze the factors that influence decisions on location. In previous years, scholars were mainly concerned with the location activities of manufacturing businesses. This was because many firms in the first half of the twentieth century had prioritized production and sales thus firms were able to have a competitive edge by choosing a location where there was low cost of production and high profit maximization. As a result, theorists focused on other factors like access to raw material, cost of transport, costs of labor and market accessibility. Several years down the line, cost has become a fundamental concern for location theorists since a wide range of studies have been conducted to analyze the impact factors such as taxation, financial incentives, civil rights unions, laws on minimum wages and the overall infrastructure have on choice of a location (Kimelberg and Williams, 2013). Throughout the years, trends have radically changed the process of corporate site selection. Some of these tendencies have made site selection process very difficult and compressed its nature temporarily. Other alterations have brought difficultly in provision of the stage of site selection choice support fostered by its growing significance (Rabianski, Delisle and Carn, 2001). The emergence of trends like globalization and consolidation,

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