One Argument for Why Subsidiaries Should Be Only Partly-Owned by the Parent

question 30

Multiple Choice

One argument for why subsidiaries should be only partly-owned by the parent is:

• A) that the potential conflict of interests between the MNC's managers and shareholders is avoided.
• B) that the potential conflict of interests between the MNC's majority shareholders and minority shareholders is avoided.
• C) that the potential conflict of interests between the MNC's existing creditors is avoided.
• D) to motivate subsidiary managers by allowing them partial ownership.

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Definitions:

Organization Development

A planned, systematic process aimed at improving the effectiveness, health, and self-renewing capability of organizations through change in policies, power, leadership, control functions, and culture.

Explicit And Implicit Coercion

Direct and indirect methods of compelling someone to act in a particular way through force or intimidation.

Negative Consequences

Unfavorable outcomes or punishments resulting from an action or decision.

Change

The act or process through which something becomes different.