Which statement regarding branch offices is false?
A)Branch offices, like subsidiaries, offer a high level of control over operations.
B)Branch offices are part of the international company (i.e., it is not a separate entity).
C)Branch offices have a higher level of risk than subsidiaries.
D)Branch offices of service providers typically engage in a full spectrum of activity.

Question

Quizplus · Accepted Answer

The primary difference between a subsidiary and a branch office is that subsidiaries are separate entities, while branch offices are entities that are part of the international company. Branch offices, like subsidiaries, also offer companies a high level of control over operations and profits in international markets. In terms of risk, however, the company has invested much less in the market that can be lost in a government takeover attempt, compared to a subsidiary. Thus, branch offices offer a lower level of risk than subsidiaries. Branch offices of service providers typically engage in a full spectrum of activity in the domain of their specialization. The text cites the Chase branch offices in Europe as an example of this.

Which Statement Regarding Branch Offices Is False