Questions and Answers
What is the primary goal of a multinational corporation (MNC)?
To maximize shareholder wealth
What occurs when managers prioritize their own interests over those of shareholders?
An agency problem
Why do multinational corporations (MNCs) tend to experience greater agency problems?
Because of the distance between headquarters and subsidiaries
What can help ensure that subsidiary managers focus on serving the overall MNC?
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How many key theories justify international business?
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What does the theory of comparative advantage suggest?
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What is the primary assumption of the imperfect markets theory?
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What is the primary idea behind the product cycle theory?
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Why do firms commonly expand their product specialization in foreign countries?
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What is the consequence of agency problems in multinational corporations?
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