Internalization Theory Promotes the Idea That

question 116

Multiple Choice

Internalization theory promotes the idea that

• A) licensing gives a firm tight control over manufacturing, marketing, and strategy in a foreign country.
• B) licensing may result in a firm giving away valuable technological know-how to a potential foreign competitor.
• C) licensing has no major drawbacks as a strategy for exploiting foreign market opportunities.
• D) a problem with licensing arises when the firm's competitive advantage is based on its products rather than on the manufacturing capabilities that produce those products.
• E) licensing is always more profitable than FDI.

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Definitions:

Expected Activities

Forecasted or anticipated actions taken by an individual, group, or organization that aim to achieve certain goals or outcomes.

Financial Statement Effects

The impact of business transactions and events on the financial statements, reflecting changes in financial position.

Budgeted Income Statement

A financial forecast that projects a company's revenue, expenses, and net income for a given period.

Capital Expenditures Budget

The Capital Expenditures Budget is a plan for the funds to be spent on long-term assets that will have a useful life beyond the current fiscal year, such as buildings, equipment, or vehicles.