A rationale for wanting control over the operations of a foreign entity is that the firm might wish to take advantage of differences in factor costs across countries,producing only part of its final product in a given country,while importing other parts from where they can be produced at a lower cost.

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Quizplus · Accepted Answer

This rationale for wanting control over foreign entity operations is a legitimate strategy known as global sourcing, which takes advantage of different factor costs to reduce production costs and increase competitiveness. By managing operations in different locations, firms can optimize their supply chain and reduce expenses.

A Rationale for Wanting Control Over the Operations of a Foreign