Earth-rite organic foods inc. is an MNE based in sweden with subsidaries located in numerous countries around the world. Earth-rite has annual sales of $10 billion and employs more than 90, 000 individuals worldwide. Earth-rite currently dominates the organic food industry, but are beginning to catch up because of a growing demand for organic produce. earth-rite is considering a collaborative venture with a small chain of organic grocery stores located in brazil, a country when earth-rate has no stores. earth-rate executives are considering internalizing co-operations in brazil. which of the following, is true, best supports this plan?

collaborators ensure greater control over domestic operations.

internalizing value-chain activities increases employee turnover.

the management of earth-rite wants to maximize determination of knowledge.

by internalizing operations, earth-rite will retain control of product quality.

Question

Elyse Love

Business

29 May, 19:52

Earth-rite organic foods inc. is an MNE based in sweden with subsidaries located in numerous countries around the world. Earth-rite has annual sales of $10 billion and employs more than 90, 000 individuals worldwide. Earth-rite currently dominates the organic food industry, but are beginning to catch up because of a growing demand for organic produce. earth-rite is considering a collaborative venture with a small chain of organic grocery stores located in brazil, a country when earth-rate has no stores. earth-rate executives are considering internalizing co-operations in brazil. which of the following, is true, best supports this plan?

collaborators ensure greater control over domestic operations.

internalizing value-chain activities increases employee turnover.

the management of earth-rite wants to maximize determination of knowledge.

by internalizing operations, earth-rite will retain control of product quality.

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Answers (1)

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Sneakers · Answer 1

The correct answer is letter "D": by internalizing operations, earth-rite will retain control of product quality.

Explanation:

In International Business, Internalization refers to the activities by which a company takes control of the operations of the firm in foreign markets. Multinational Enterprises (MNE) can opt for internalizing the business requiring direct intervention on the subsidiaries abroad not only in investment but in the sharing of business practices or externalizing which implies outsourcing a company with expertise in the same region to do so.

MNEs can take advantage of internalizing to have direct control over the quality of the output the new branch develops even if it implies spending more resources.