CLEP Marketing Practice Exam 2026 – All-in-One Guide to Achieve Top Scores!

The main risk associated with management contracting is indeed the dependency on foreign firms. In management contracting, a firm outsources the management and operational responsibilities of a project to a contractor, which could be based in a different country. This creates a reliance on the expertise, practices, and policies of the foreign contractor. Such dependency can lead to challenges, especially if the contractor's performance does not align with the firm’s expectations or standards. Additionally, any geopolitical issues, changes in regulations, or disruptions in communication with the foreign contractor can significantly impact the project’s success.

This reliance can also result in less control over day-to-day operations and decision-making processes, as well as potential misalignment with the firm’s strategic goals, depending on the contractor's priorities and approaches. Therefore, while the other options present risks in different contexts, the unique aspect of relying on external, potentially foreign, management makes dependency on foreign firms the main risk in management contracting.