Earlinwex, an apparel wholesaler, wants to set up a warehouse in a neighboring country that levies taxes at a low rate. Before setting up the store, the operations manager of the company travels to the country to study the political scenario that affects wholesale businesses, the regulations governing the textile industry, and the business strategies of the existing players in the market. Which of the following concepts does this scenario best illustrate?

Question

Quizplus · Accepted Answer

The scenario best illustrates environmental scanning, which refers to the process of collecting and analyzing information about the external environment in which an organization operates. In this case, the operations manager is gathering information about the political and regulatory environment, as well as the competitive landscape in the neighboring country, in order to make informed decisions about setting up the warehouse. Punctuated equilibrium refers to the idea that organizations experience long periods of stability punctuated by rapid changes or crises. Opportunistic behavior refers to the tendency of individuals or organizations to take advantage of favorable circumstances without regard for ethical considerations. Transfer pricing refers to the practice of setting prices for goods or services exchanged between units or subsidiaries of the same organization.

Earlinwex, an Apparel Wholesaler, Wants to Set Up a Warehouse