Multinational Corporations

What is the large company in a multinational structure known as?

• The subsidiary company

• The affiliate company

• The parent company

• The joint venture company

What is another reason why companies become multinational?

• To secure cheaper premises and cheap labour.

• To increase product prices in foreign markets.

• To reduce competition in local markets.

• To limit access to international markets.

What is a financial incentive for companies to become multinational?

• To receive government grants or pay less tax.

• To increase employee salaries.

• To reduce production costs in domestic markets.

• To enhance brand recognition in local markets.

What role have multinationals played in globalisation?

• They have played an important role in the development and spread of globalisation.

• They have hindered the growth of local economies.

• They have focused solely on domestic markets.

• They have reduced international trade barriers.

Where do multinational corporations usually have their headquarters?

• In one country, but they have assembly and production facilities in other countries.

• In multiple countries simultaneously.

• Only in the country where they were founded.

• In offshore locations to avoid taxes.

What is a strategic reason for companies to become multinational?

• To increase their knowledge of foreign markets.

• To reduce production costs in their home country.

• To limit their market reach and focus on local customers.

• To avoid competition in their domestic market.

What is a subsidiary in the context of multinational corporations?

• A smaller company that the parent company either owns entirely or controls more than 50% of the voting share.

• A company that operates independently without any ownership from a parent company.

• A division of a company that is responsible for a specific product line.

• A company that is formed by merging two or more companies.

What are multinational or transnational corporations?

• Small local businesses that operate in a single country.

• Large businesses that operate in several different countries.

• Non-profit organizations that provide services globally.

• Government agencies that manage international trade.

Why do companies become multinational to avoid trade barriers?

• To increase their market share in domestic markets.

• To avoid trade barriers, foreign exchange fluctuations, and transport costs.

• To reduce their workforce and cut costs.

• To focus solely on local markets and avoid international competition.

How do multinational companies often expand?

• By merging or acquiring other smaller companies.

• By reducing their workforce.

• By increasing their product prices.

• By focusing solely on domestic markets.