The Parent of MNC Can Implement Compensation Plans That Directly

question 24

True/False

The parent of MNC can implement compensation plans that directly reward the subsidiary managers for enhancing the value of the MNC.

---

Definitions:

Market Organization

A method of organization in which private parties make their own plans and decisions with the guidance of unregulated market prices. The basic economic questions of consumption, production, and distribution are answered through these decentralized decisions.

Competitive Markets

A market structure characterized by many buyers and sellers, free entry and exit, and products that are similar but differentiated, leading to competition on price, quality, and innovation.

Private Property Rights

Legal rights that grant individuals or organizations exclusive ownership and control over their property.

Competitive Market Economy

An economic system where businesses compete freely with minimal government intervention, prices are determined by supply and demand, and resources are allocated through the price mechanism.