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.

Question

Quizplus · Accepted Answer

Allowing subsidiary managers partial ownership can provide them with greater motivation to improve the subsidiary's performance and increase profits, as they will directly benefit from the success of the business. This can help align their interests with those of the parent company, ultimately leading to better overall performance for the MNC.

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