Answer: The disadvantage of establishing a greenfield venture from the given options is:
E. It is much more difficult to build an organizational culture from scratch than to change the culture of an existing unit.
When starting a greenfield venture, an organization has to build everything from the ground up, including the organizational culture. Establishing a strong and effective culture can be challenging and time-consuming. On the other hand, in an existing unit, the culture is already established to some extent, and it may be comparatively easier to adapt or change the existing culture to align with the organization's goals and values.
The other options listed do not directly represent disadvantages of establishing a greenfield venture. Here is a breakdown of the remaining options:
A. They are slower to establish than acquisitions: This option compares the speed of establishing a greenfield venture to acquisitions, but it doesn't necessarily imply a disadvantage. It depends on the specific context and objectives of the organization.
B. A firm does not have the freedom to build the kind of subsidiary that it wants: This option doesn't necessarily represent a disadvantage. It may be a limitation in terms of customization, but it can also be an advantage as it allows the firm to adapt to local market conditions and regulations.
C. Companies find it difficult to avoid falling into the trap of the hubris hypothesis: The hubris hypothesis refers to overconfidence and excessive risk-taking, which can be a potential issue in any venture, including acquisitions or greenfield ventures. It is not specific to greenfield ventures, so it is not a disadvantage unique to them.
D. They have a higher potential for throwing up unpleasant surprises: This option is not necessarily a disadvantage exclusive to greenfield ventures. Any business endeavor, including acquisitions or expansions, can come with unexpected challenges or surprises.
Therefore, based on the options provided, the correct answer is E. It is much more difficult to build an organizational culture from scratch than to change the culture of an existing unit.
Explanation: :)