1. MOUNT KENYA UNIVERSITY
SCHOOL OF BUSINESS AND PUBLIC MANAGEMENT
Assignment summited in partial fulfillment of the requirement of the course
master of business administration of Mount Kenya University
MAUTI BENARD OMBATI MBA/2014/81408
COURSE UNIT: MBM 5207: STRATEGIC MANAGEMENT
DATE , 2015

2. Question 1:
Elaborate how managers use extrapolation treads and the use of furies expert opinion
analyzing the future of firms
The use extrapolation is being applied in statistical technique of inferring unknown from the
known. It attempts to predict future data by relying on historical data, such as estimating the size
of total sales in a few years from now on the basis of current sales levels, size and its rate of
growth. Extrapolation may be valid where the present circumstances do not indicate any
interruption in the long-established past trends. However, a straight line extrapolation is used
where a short-term trend is believed to continue far in into future as it will fraught
with risk because some unforeseeable factors almost always intervene. We can as well say that;
The extrapolation is the process of estimating, beyond the original observation range, the value
of a variable on the basis of its relationship with another variable for example level of
advertisement and total sales turn over. It is similar to interpolation, which produces estimates
between known observations, but extrapolation is subject to greater uncertainty and a higher risk
of producing meaningless results. Extrapolation may also mean extension of a method, assuming
that similar methods will be applicable. Extrapolation may also apply to human experience to
project, extend, or expand known experience into an area not known or previously experienced
so as to arrive at a knowledge of the unknown a driver extrapolates road conditions beyond his
sight while driving. The extrapolation method can be applied in the interior
reconstruction problem.
Question 2:
What are the major factors that make a country a risky investment destination?
The economic and financial conditions in a country that affect whether individuals and
businesses are willing to invest money and acquire a stake in businesses opportunities operating.
Investment climate is affected by many factors, including: poverty, crime, infrastructure,
workforce, national security, political instability, regime uncertainty, taxes, and rule of law,
property rights, government regulations, government transparency and government
accountability.

3. Poor management of the country’s governance systems
There are often political factors involved for a countries to remain poor with risk investment,
and one of those is bad government. Governments need to do a lot of things to encourage
development they need to build and maintain infrastructure, and raise and spend finance wisely,
on the right projects. When governments are incompetent at managing infrastructure,
development is impossible. Nobody wants to invest in that country
2. Corruption
If you have ever lived in a country where corruption is rife of the day, you will now know how
frustrating and dis-empowering corruption can be. That is when real endemic corruption happens
to a bit slow down corruption and makes the country risky for internal and foreign investment.
3. Trade laws
when a country set out trade laws sometimes it may be on a in here because it is largely a
political matter. This may in one way or the other hinder investment,
Political instability
Finally, political instability plays a key a role as to why some countries remain poor. This could
be ethnic tension, tribalism, or all-out war. Needless to say, countries with long-term conflicts
such as the ones in Somalia or Afghanistan, have little chance of developing. Other nations such
as Sri Lanka, have simmering ethnic divides that are a constant distraction, de-stabilizing the
region and discouraging investment.
References
Baker, M.I (2005): Strategic Management (2nd Edition) MacMillan
Bush, P.S and Houston, M.I (2000): Strategic Management (Latest Edition).
Harrison, J.S (2003): Strategic Management: Of Resources and Relationships, Leyh Publishing
LLC.
Wheelen, T.L and Hunger, J.D (2005): Concepts in Strategic Management and Business Policy,
Pearson Education, Singeapore.