MrSmith Is the Recently Appointed CEO of a Diversified MNE

question 14

Essay

Mr.Smith is the recently appointed CEO of a diversified MNE operating in 22 countries on four continents and in multiple industries ranging from bulk chemicals to consumer packaged goods.He became concerned that in his very decentralized organization,all businesses were managed primarily by the national subsidiaries.With a poor record in innovation,Smith wondered what he could do to improve the innovation process.What two or three changes would you recommend he consider?

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Definitions:

Price Level

The averaged-out price for the total spectrum of goods and services in the economy.

Nominal Wage

The wage paid to workers stated in current money terms, without adjustment for inflation.

Real Wage

The purchasing power of an individual's income, accounting for inflation and reflecting how many goods and services can be bought.

Nominal Wages

Wages paid to employees not adjusted for changes in price level, representing the monetary value of earnings.