If managers of foreign subsidiaries make decisions that maximize the values of their respective subsidiaries, they automatically maximize the value of the entire corporation.

Question

Quizplus · Accepted Answer

While maximizing the value of foreign subsidiaries may contribute to the overall value of the corporation, managers must also consider the impact of their decisions on other subsidiaries and the corporation as a whole. Therefore, maximizing the value of each individual subsidiary does not guarantee the maximization of the entire corporation's value.

If Managers of Foreign Subsidiaries Make Decisions That Maximize the Values