Ranga Ramasesh is the operations manager for a firm that is trying to decide which one of four countries it should research for possible outsourcing providers. The first step is to select a country based on cultural risk factors, which are critical to eventual business success with the provider. Ranga has reviewed outsourcing provider directories and found that the four countries in the table below have an ample number of providers from which they can choose. To aid in the country selection step, he has enlisted the aid of a cultural expert, John Wang, who has provided ratings of the various criteria in the table below. The resulting ratings are on a 1 to 10 scale, where 1 is a low risk and 10 is a high risk. Further, John Wang has determined six criteria weightings. Trust, with a weight of 0.40; Quality, with 0.20; Religious, with 0.10; Individualism, with 0.10; Time, with 0.10; and Uncertainty, with 0.10.
Required:
1. Using the weighted factor-rating method, which country should Ranga select to minimize risk?
Selection Criterion Weight Mexico Panama Costa Rica Peru
Trust 0.40 1 2 2 1
Society value of quality work 0.20 7 10 9 10
Religious attitudes 0.10 3 3 3 5
Individualism attitudes 0.10 4 6 2 3
Time orientation attitudes 0.10 4 6 7 3
Uncertainity avoidance attitude 0.10 3 2 4 2