In which of the following modes of licensing does the firm hire local producers to produce the product, giving the company less control over the manufacturing process?
A) contract manufacturing
B) management contracts
C) direct investment
D) joint venture production
E) greenfield venturing

Question

Quizplus · Accepted Answer

In contract manufacturing, the firm hires local producers to manufacture the product, but the company has less control over the manufacturing process compared to other modes of licensing. In management contracts, the company provides management expertise to a local firm, while in direct investment, the company invests in a foreign company or sets up its own subsidiary. Joint venture production involves the formation of a partnership with a local company, and greenfield venturing involves setting up a wholly new operation in a foreign country.

In Which of the Following Modes of Licensing Does the Firm