The Major Reason for Using Expatriates for Staffing Subsidiary Operations

question 53

Multiple Choice

The major reason for using expatriates for staffing subsidiary operations is

• A)greater understanding of the foreign laws.
• B)better relationships with local customers.
• C)lower costs incurred with expatriates.
• D)greater familiarity with culture.
• E)technical competence.

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Definitions:

Transaction Cost

Expenses incurred when buying or selling goods or services, including fees, taxes, and other charges.

Externality Problem

A situation in which a third party is affected by the consequences of a transaction or activity between others, either positively or negatively.

Private Contract

An agreement between private parties that creates mutual obligations enforceable by law.

Pollution Permits

Tradable permits issued by governments that allow the holder to emit a certain amount of pollution; used to control and reduce environmental harm.