Final answer:
The entry mode decision is indeed based on a company's desired control and the associated risks, making the statement true. It's a strategic choice in foreign direct investment that can have significant implications for the long-term commitment of a company to a foreign market.
Step-by-step explanation:
The statement that the entry mode decision is the approach to international expansion a company chooses based on desired control and based on the risk it can afford is true. When a company engages in foreign direct investment (FDI), it assumes some managerial responsibility and commits to a longer-term presence in the foreign market. This is in contrast to portfolio investments where an investor can quickly buy or sell assets, such as government bonds, with relative ease. FDI transactions, like purchasing a foreign company, require careful planning and can take much longer to execute.
Environmentalists' express concerns that MNCs may shift production to countries with lax pollution standards, trying to balance the trade-offs between environmental protections and job creation. Similarly, politicians worry about over-reliance on imported goods like oil, which might pose a security threat in times of conflict. These issues highlight the complexity of international trade and its implications on global economic integration, as seen with the growth of the World Trade Organization (WTO) and regional trading blocs. Ultimately, governments aim to protect national interests and may restrict imports to support businesses, safeguard jobs, and ensure security.