Question

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

Options

• Licensing/franchising

• Wholly owned subsidiary

• Contract manufacturing

• 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 Wholly owned subsidiary.