IB chapter 10

After the production process has been stabilized, the specifications are sent to

• The affiliates

• Home market

• Headquarters

• All of the above

____ companies often have no choice but to delegate decisions to subsidiary

• Larger, older

• Larger, newer

• Smaller, older

• Smaller, newer

Which of the following is NOT a variable that determines where decisions are made among parent and subsidiary units of an international company

• Product and equipment

• Size and age of the international company

• Distance of the host country from headquarters

• Budget allocation for subsidiary operations

How does the level of reliance on subsidiary management vary based on the distance of the host country from headquarters?

• The closer the host country, the more reliance on subsidiary management

• The farther the host country, the more reliance on subsidiary management

• Reliance on subsidiary management is not affected by the distance from headquarters

• Reliance on subsidiary management increases with the number of subsidiaries in the host country

Subsidiaries detriment is

• Companies controlled by another company

• Pricing between members of the same enterprise

• A small loss for a subsidiary results in a greater gain for the total international company

• A form of organization

The size of the market in a country is big enough for economies of scale to manufacture an entire industrial product or offer a full range of services for that market.

• True

• False

How many variables that determine where decision are made among parent and subsidiary units of an international company

• 3

• 4

• 5

• 6

When there is an order, the international company headquarter will decide which subsidiary gets the order

• True

• False

If all big decisions are made or are perceived to be made by headquarters, the management of each subsidiary can loose incentive and prestige or face with their employees and the community.

• False

• True

Decisions can be made either at headquarters or at subsidiaries.

• True

• False