Which of the Following Is a Disadvantage of the International

question 20

Multiple Choice

Which of the following is a disadvantage of the international business strategy of licensing?

• A) It subjects the original firm to high transportation expenses.
• B) The profits of a firm using this strategy are limited to those it receives from royalty payments.
• C) It allows a firm to enter a foreign market in high-risk conditions.
• D) The costs of licensing are quite high and must be borne solely by the original firm.

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Definitions:

Mechanistic Structure

An organizational design that emphasizes structured activities, specialized tasks, and centralized decision-making.

Tall Structure

An organizational structure with multiple layers of management between frontline employees and the top level, potentially slowing decision-making.

Problem Analyzability

Refers to the degree to which a problem can be analyzed and solved with existing knowledge and techniques.

Search Procedures

Methods or processes used to gather information or locate resources.