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

Question

Quizplus · Accepted Answer

Management contracting can prevent a company from setting up its own operations for a period of time because it involves a foreign company managing the operations, which may limit the domestic firm's ability to establish its own presence.

Which of the Following Is a Drawback of Management Contracting