Centralized Decision Making in a Multinational Company (MNC)is More Likely

question 8

Multiple Choice

Centralized decision making in a multinational company (MNC) is more likely when:

• A) domestic competition increases and management wants a local subsidiary manager to have greater decision-making authority.
• B) the home office has more confidence in delegating to the local level and less to gain by making all the important decisions.
• C) there are important brand names or patent rights involved and a multinational company (MNC) wants to create as much protection as possible.
• D) a subsidiary has superior staff and resources that is likely to become increasingly skilled in manufacturing and marketing products at the local level over time.

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Definitions:

Predatory Pricing

A competitive strategy where a company sets very low prices for its products or services with the intent to drive competitors out of the market.

Break-even Analysis

A calculation that determines when a business or project will be able to cover all its expenses and begin to make a profit.

Fixed Costs

Expenses that do not change with the level of production or sales activities within a certain scale, such as rent, salaries, and insurance.

Variable Costs

are expenses that change in proportion to the activity of a business, such as sales volumes, including costs of goods sold and direct labor costs.