According to internalization theory,one of the drawbacks of licensing is that:
A)it may result in a firm's technological know-how being restricted to a limited knowledge base and stifles any future development.
B)it does not give a firm the tight control over manufacturing,marketing,and strategy in a foreign country that may be required to maximize its profitability.
C)when a firm allows another enterprise to produce its products under license,the licensee bears the costs or risks.
D)a firm's competitive advantage is based entirely on its products with management,marketing,and manufacturing capabilities playing nominal roles.

Question

Quizplus · Accepted Answer

A problem with licensing is that it does not give a firm the tight control over manufacturing,marketing,and strategy in a foreign country that may be required to maximize its profitability.The rationale for wanting control over the strategy of a foreign entity is that,unlike a wholly owned subsidiary,a licensee would probably not accept impositions,because it would likely reduce the licensee's profit,or it might even cause the licensee to take a loss.

According to Internalization Theory,one of the Drawbacks of Licensing Is