To balance the operating and financial risks that are so variable for a multinational company, Nestlé allows its foreign operating subsidiaries ____ operational flexibility and follows a ____ financing strategy.
A) decentralized; centralized
B) centralized; centralized
C) centralized; decentralized
D) decentralized; decentralized

Question

Quizplus · Accepted Answer

Nestlé allows its foreign operating subsidiaries decentralized operational flexibility, meaning that they have some level of autonomy in making operational decisions. This allows for adaptation to local market conditions and better risk management. However, Nestlé follows a centralized financing strategy, meaning that financial decisions and control are centralized at the headquarters level. This allows for better coordination and control over financial risks. Therefore, the best option is A - decentralized operational flexibility and centralized financing strategy.

To Balance the Operating and Financial Risks That Are So