Question

Companies which want to exercise full control over their overseas operations prefer ______ more to enter International business.

• A. joint venture
• B. stock supplies
• C. importing and exporting
• D. wholly owned subsidiaries

Answer 1

The correct option is D wholly owned subsidiaries

• This entry mode of international business is preferred by companies which want to exercise full control over their overseas operations.
  
• The parent company acquires full control over the foreign company by making 100 per cent investment in its equity capital
  
• A wholly owned subsidiary in a foreign market can be established in either of the two ways:
  

(i) Setting up a new firm altogether to start operations in a foreign country — also referred to as a green field venture, or

(ii) Acquiring an established firm in the foreign country and using that firm to manufacture and/or promote its products in the host nation.