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:

Accrual Accounting

Accrual accounting is a method of accounting that records revenues and expenses when they are incurred, regardless of when cash is exchanged.

Recognizes Revenues

Recognizing revenues involves the accounting process of recording income when it is earned, which may not necessarily coincide with when payment is received.

Not-for-Profit Organizations

Entities that operate for purposes other than to make a profit, typically focusing on charitable, educational, or social objectives.

Public Accountants

are certified professionals who provide accounting services, including auditing, tax advice, and financial planning, to the public.