Unlike a licensing arrangement, the parent company of a wholly owned business:
A) gives up control over the quality of the product or service sold by the foreign business.
B) has complete control over the foreign facilities.
C) functions in the foreign market by obtaining a license from the local manufacturers.
D) receives a percentage of the profits.

Question

Quizplus · Accepted Answer

Unlike in a licensing arrangement, where the parent company grants a license to a foreign company to produce and sell its products or services, in a wholly owned business, the parent company has complete control over the foreign facilities. This allows the parent company to maintain the quality of its products or services and control the operations of the foreign business. The parent company would also receive all of the profits rather than just a percentage.

Unlike a Licensing Arrangement, the Parent Company of a Wholly