Why Can a Company More Easily Pursue a Global Strategy

question 31

Multiple Choice

Why can a company more easily pursue a global strategy when it owns 100 percent of foreign operations?

• A) The company is not likely to face overcapacity issues.
• B) The company limits foreign exchange rates fluctuations.
• C) The company avoids communication misunderstandings.
• D) The company can sub-optimize results in one country in order to optimize results globally.

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Definitions:

Financial Performance

An assessment of how well a firm uses assets from its primary mode of business and generates revenues.

Stock Price

The current price at which a share of a company is traded on the stock market, reflecting the market's supply and demand for the stock.

Activist Investors

Investors, often holding significant stock in a company, who seek to effect change within the company by influencing its management and policies.

Shareholders

Individuals or institutions that own one or more shares of stock in a public company, making them partial owners of the company.