Which of the Following Is the Basic Difference Between Multidomestic

question 46

Multiple Choice

Which of the following is the basic difference between multidomestic corporations and global companies?

• A) Multidomestic corporations typically do business with more countries than global companies do.
• B) Multidomestic corporations are run by global companies but must be owned by a local, national company.
• C) Multidomestic corporations decentralize management to the local country, while global companies centralize management in the home country.
• D) Multidomestic corporations pay more taxes than global companies do.
• E) Global companies decentralize management to the local country, while multidomestic corporations centralize management in the home country.

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Definitions:

Free Trade

The absence of artificial (government) barriers to trade among individuals and firms in different nations.

Economic Inefficiency

A situation where resources are not allocated optimally, leading to waste or loss in the potential value of output.

Hollow Corporation

A business model where a company outsources most of its production processes, keeping only core functions such as design, marketing, and branding in-house.

Imports Foreign Goods

The act of bringing goods and services from foreign countries into one's own country for sale.