Question at position 4 Foreign-entry modes such as acquisitions and greenfield projects are usually disadvantageous because they require a high level of capital and resource investment but allow for a low level of control.falsetrue单项选择题
A
false
B
true

Question

Question at position 4 Foreign-entry modes such as acquisitions and greenfield projects are usually disadvantageous because they require a high level of capital and resource investment but allow for a low level of control.falsetrue单项选择题

A

false

B

true

BlackTom AI · Accepted Answer

Acquisitions and greenfield projects grant firms high control over foreign operations while requiring substantial capital and resources, so the statement is incorrect.

1. Relevant knowledge points and concepts
- Foreign-entry modes vary by required investment and degree of control: high-control/high-investment modes (greenfield investment and acquisitions) versus low-control/low-investment modes (exporting, licensing, franchising).
- Greenfield project: building new operations from scratch in the host country — high setup cost, full managerial and operational control.
- Acquisition: buying an existing foreign firm — often costly, but provides immediate assets, market access, and high control.
- Joint ventures and minority equity stakes typically provide intermediate control; licensing and exporting provide low control but lower investment.

2. Step-by-step reasoning
- The statement claims acquisitions and greenfield projects “require a high level of capital and resource investment” (true) but “allow for a low level of control” (false).
- Verify first clause: both modes indeed require high capital and resources — preparing facilities, complying with regulations, acquiring assets, managing local operations — so that portion is correct.
- Verify second clause: greenfield gives full operational design and managerial decisions; acquisition transfers control through ownership. Both provide high control, not low.

3. Intermediate logical steps
- Compare modes:
  - Greenfield: high investment → high control (choice of technology, staffing, structure).
  - Acquisition: high investment → high control (ownership rights, integration decisions).
  - Licensing/franchising: low investment → low control (licensee manages local operations).
- Therefore the conjunction “high investment but low control” is inconsistent with the known typology.

4. Why the correct answer is correct
- Because while the investment part is correct, the control part is wrong: these entry modes deliver high control. The overall statement is false.

5. Why the other option is incorrect
- Choosing “true” would accept that acquisitions/greenfield allow low control, which contradicts standard international business theory and practice.

6. Conclusion
- The correct answer is false, which matches the provided answer.

Question at position 4 Foreign-entry modes such as acquisitions and greenfield projects are usually disadvantageous because they require a high level of capital and resource investment but allow for a low level of control.falsetrue单项选择题

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