Multinational Firms Have Traditionally Managed Operations Outside Their Home Country

question 7

Multiple Choice

Multinational firms have traditionally managed operations outside their home country with an approach that permits individual subsidiaries to compete independently in different country-markets. Here each subsidiary resembles a strategic business unit that is expected to contribute earnings and growth to the organization. This describes:

• A)a multidomestic strategy.
• B)a differentiated strategy.
• C)a global strategy.
• D)an export-based strategy.
• E)a coordinated strategy.

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Definitions:

Influence Exchange Rates

Refers to the impact of various economic, political, and market factors on the value of one currency in relation to another.

Fixed Exchange Rate System

A currency system where the value of a country's currency is pegged to another currency, a basket of currencies, or a commodity like gold.

Exchange Rate

The value of one currency for the purpose of conversion to another.

Governments

The governing bodies of a nation, state, or community, responsible for creating and enforcing laws and policies.