Which of the following is a drawback of management contracting?
A) It prevents a company from setting up its own operations for a period of time.
B) It is a high-risk method of getting into a foreign market.
C) It yields income to the contracting firm only much later in the process.
D) It does not provide the option of buying shares in the managed company later on.
E) It requires a domestic firm to export its products to a foreign company.

Question

Quizplus · Accepted Answer

Management contracting involves a company providing management expertise to a foreign company, which can prevent the company from establishing its own operations in that market during the contract period.

Which of the Following Is a Drawback of Management Contracting