Final answer:
The pair that closely resembles each other in the amount of ownership, control, and risk obtained in operating international businesses is "Franchising/licensing." Option D is correct.
Step-by-step explanation:
In franchising, a company grants the rights to use its business model, brand, and processes, allowing some control but limited ownership, while licensing involves providing rights to intangible property (like patents or trademarks) without giving up ownership or much control. Both models allow international expansion without complete ownership, retaining varying levels of control and sharing risks with local partners.
These approaches offer avenues for global market entry with reduced financial commitments and risks compared to wholly owned foreign affiliates or direct investments. However, they differ in the degree of control and ownership transferred, impacting the level of risk involved in international operations.
These similarities and differences highlight how franchising and licensing strike a balance between ownership, control, and risk, making them a closely related pair in international business operations.
Correct answer: d. Franchising/licensing
Complete question:
Which of the following pairs of alternatives closely resemble each other in the amount of ownership, control and risk obtained in operating international businesses?
- a. Direct investment/franchising
- b. Wholly owned foreign affiliate/countertrade
- c. Exporting/licensing
- d. Franchising/licensing
- e. All of these