A multinational company (MNC)is likely to decentralize its decision making when:
A) a subsidiary is selling new products in growing markets.
B) it is a high-tech, research-intensive firm dealing with sophisticated levels of technology.
C) the home office has a lot of confidence in delegating to a local level.
D) local subsidiary managers are inexperienced or ineffective.

Question

Quizplus · Accepted Answer

If a subsidiary has highly competent local managers, the chances for decentralization are increased because the home office has more confidence in delegating to the local level and less to gain by making all the important decisions. Conversely, if the local managers are inexperienced or not highly effective, a multinational company (MNC) likely will centralize decision making and make many of the major decisions at headquarters.

A Multinational Company (MNC)is Likely to Decentralize Its Decision Making