A Firm Is Most Likely to Favor Foreign Direct Investment

question 108

Multiple Choice

A firm is most likely to favor foreign direct investment over exporting when

• A) the firm wants its technological know-how to be widely disseminated.
• B) the firm wishes to maintain control over its operations and business strategy.
• C) the transportation costs are low.
• D) there are no trade barriers.
• E) the firm wants to customize its products as per the tastes and preferences of foreign consumers.

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Definitions:

External Environment

Refers to all external factors—including social, economic, natural, and political—that affect an individual's or organization's actions and decisions.

Erikson's Developmental Theory

A theory by Erik Erikson that outlines eight stages of psychosocial development from infancy to adulthood.

Psychosocial

Refers to the interrelation of social factors and individual thought and behavior.