Question

Which of the following is viewed as the riskiest and most costly form of international expansion? Multiple Choice Joint venture Wholly-owned subsidiaries Franchising Importing Outsourcing

Answer 1

Answer:  Wholly-owned subsidiaries

Explanation: In simple words, wholly owned subsidiaries refers to the business arrangement in which one coma pony owns other companies and have full control over the operations of the owned company.

The owning company is called the parent company and the  company owned is called the subsidiary. This arrangement is very common for international expansion as the owning entity can control the business with all the rules followed by a separate entity, that is, subsidiary.

    However it requires heavy funds to make such an arrangement and develop a brand new entity operating at high level. Also it is very risky as the managers of the subsidiary would be different and there is a high chance that they can do any ethical or legal misconduct.