FedEx Opened a Wholly Owned Subsidiary in the Form of a Regional

question 15

Multiple Choice

FedEx opened a wholly owned subsidiary in the form of a regional distribution center in the Philippines in 1995. Besides certain unavoidable political risks, what is a major disadvantage associated with this form of direct ownership?

• A) Huge losses
• B) Competitive conflict
• C) Huge costs
• D) No control of proprietary knowledge

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Definitions:

Rational Self-Interest

The principle that individuals tend to make decisions that they believe are best for themselves, maximizing their own utility.

Values

The principles or standards of behavior that are regarded as important in making decisions or judgments.

Sold

The completed transaction of exchanging a good or service for money or other compensation.

Reservation Price

The absolute highest price that a buyer is prepared to pay for a product or service.