Which Entry Mode Gives a Multinational the Tightest Control Over

question 23

Multiple Choice

Which entry mode gives a multinational the tightest control over foreign operations?

• A) Exporting from the home country and letting a foreign agent organize local marketing
• B) Licensing
• C) Franchising
• D) Entering into a joint venture with a foreign company to set up overseas operations
• E) Setting up a wholly owned subsidiary

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Definitions:

Money Distribution

The process of disbursing or allocating financial resources, often by a corporation or governmental entity.

Partnership Liability

The financial obligations or debts for which a partnership is responsible, which can affect the partners' individual tax situations.

Partnership Interest

An ownership share in a partnership, representing a partner's stake in the assets and operations of the business.

Ordinary Income

Income earned through wages, salaries, commissions, and interest, which is taxed at standard federal income tax rates.