Which of the Following Is a Drawback of Decentralizing a Multinational

question 75

Multiple Choice

Which of the following is a drawback of decentralizing a multinational company?

• A) It may lead to increased exchange rate risk.
• B) It may result in lack of control and results in increasing risk.
• C) It creates less responsiveness to the needs of a subunit's customers, suppliers, and employees.
• D) It may lead to an increase in bureaucracy.

---

Definitions:

Net Benefit

The total positive impact of a decision or action, subtracting any costs or negative effects associated with it.

Trade

The exchange of goods, services, or both between parties, which can occur domestically or internationally.

Perfectly Competitive Market

A market structure characterized by many sellers and buyers, homogeneous products, and the free entry and exit of firms, leading to efficient outcome prices.

Society

A group of individuals living together in a more or less ordered community, often sharing common cultural and social norms.