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:

Environmental Damage

The degradation or harm caused to the natural environment due to human activities, pollution, or natural disasters, impacting ecosystems and biodiversity.

Reciprocity

The practice of exchanging things with others for mutual benefit, especially privileges granted by one country or organization to another.

Work Performance

The effectiveness and efficiency with which an individual or group accomplishes their assigned tasks and goals.

Climate

The average weather conditions in a place over a long period, typically used to describe a geographic region's general weather patterns.