Final Answer:
Donald enjoys the excitement and challenge of forming a firm in Europe that is totally owned and controlled by his company because he knows that although the investment will be substantial, it could result in a large return. This type of organization is an example of a wholly-owned subsidiary,So, the correct ption is 4.
Step-by-step explanation:
A wholly-owned subsidiary refers to a company that is entirely owned and controlled by another company. In this case, Donald's firm in Europe would be fully owned and operated by his original company. This form of organization provides Donald with maximum control over the business operations, decision-making processes, and profits generated. It entails a substantial upfront investment but offers the potential for significant returns, aligning with Donald's expectation of a large return on his investment.
Establishing a wholly-owned subsidiary allows Donald to navigate the European market with autonomy, making strategic decisions tailored to his company's objectives. The ownership structure ensures that all aspects of the subsidiary align with the parent company's vision and policies.
While the initial investment may be high, the potential return is maximized as the profits generated by the subsidiary contribute directly to Donald's company. This approach contrasts with other forms of collaboration, such as joint ventures or strategic alliances, where ownership and control are shared.
By opting for a wholly-owned subsidiary, Donald gains a competitive advantage in terms of brand consistency, operational efficiency, and the ability to implement a unified business strategy. This organizational structure reflects Donald's confidence in the venture's success and his commitment to fully leveraging the European market's potential under the umbrella of his company's complete ownership and control,Thus, the correct option is 4.