Question

Which one of the following modes of entry permits greatest degree of control over overseas operations?

(a) Licensing/franchising

(b) Wholly owned subsidiary

(c) Contract manufacturing

(d) Joint venture

Answer 1

A wholly owned subsidiary exercises all the decision-making powers and complete managerial control over the overseas operations of its parent company. A wholly owned subsidiary is created by a company by buying up the entire equity of a foreign firm.

Hence, the correct answer is option (b).