When conducting international business, firms generally face the most risk when they:
A) engage in franchising.
B) make acquisitions of existing operations.
C) establish new subsidiaries.
D) engage of international trade.
E) make acquisitions of existing operations AND establish new subsidiaries.

Question

Quizplus · Accepted Answer

Both making acquisitions of existing operations and establishing new subsidiaries involve a significant investment of resources and entail substantial risk, such as cultural differences and regulatory barriers. These risks are greater than those associated with engaging in franchising or international trade.

When Conducting International Business, Firms Generally Face the Most Risk