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.

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Definitions:

Consolidated Cash

The total amount of cash held by a parent company and its subsidiaries, presented as a single figure in consolidated financial statements.

Acquisition Transaction

A deal or arrangement in which one company purchases another company or its assets.

Common Stock

A type of equity ownership in corporations, typically carrying voting rights and eligibility to share in dividends.

Par Value

The face value of a bond or stock as stated by the issuing company, which often bears no relation to its market value.