Which of the Following Might Necessitate the Delegation of Manufacturing

question 59

Multiple Choice

Which of the following might necessitate the delegation of manufacturing and production functions to foreign subsidiaries?

• A) Pressures for local responsiveness due to differences in infrastructure or traditional practices among countries
• B) When meaningful differentiation on non-price factors is difficult and price is the main competitive weapon
• C) Where there is persistent excess capacity, and where consumers are powerful and face low switching costs
• D) In industries producing commodity-type products
• E) The liberalization of the world trade and investment environment in recent decades

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Definitions:

Voting Common Stock

Shares that give the shareholder the right to vote on company policies and the election of the board of directors.

Net Loss

The result when a company's expenses exceed its revenues during a specific period, indicating that the business incurred more costs than the income it generated.

Significant Influence

The power to participate in the financial and operating policy decisions of an investee without controlling those policies.

Common Stock

Equity owning in a firm that grants shareholders voting rights and a share in the company's profits, typically through dividends.