Which of the following is true of opportunistic and formal ...

[segrsyd]

Which of the following is true of opportunistic and formal planning?
 
  A) Firms that use only opportunistic planning will have no clear sense of direction.
  B) Formal planning should allow for creative responses within the organized framework.
  C) Jack Welch, formerly of GE, was a strong proponent of formal planning over opportunistic planning.
  D) Firms should carefully choose either formal or opportunistic planning after thoughtful consideration.

Question 2

What are the disadvantages of a wholly owned subsidiary as an entry mode to foreign markets?
 
  What will be an ideal response?

[harveenkau8139]

Answer to Question 1

A

Answer to Question 2

A wholly owned subsidiary offers a firm maximum control over proprietary knowledge and technology, so that competitors cannot gain access. The foreign company retains full discretion to move resources to other countries and thereby enjoys greater strategic flexibility. A disadvantage is that wholly owned subsidiaries require large capital outlays and ownership is thus the most expensive method of operating in foreign markets. The firm bears the full brunt of business risks. Corporate managers may not sufficiently understand local conditions. If the firm exclusively uses wholly owned subsidiaries, the firm may not be able to operate in markets where legal or political imperatives require foreign firms to establish joint ventures with local partners.