What is the primary advantage of operating interdependent subsidiaries?
A) It reduces the need to control subsidiaries and to coordinate their activities.
B) It allows the company to integrate scale-efficient operations and to cross-subsidize subsidiaries when necessary.
C) It provides an opportunity to balance the interests of subsidiaries with the needs of the headquarters. .
D) It prevents subsidiaries from becoming too independent or uncontrolled.

Question

Quizplus · Accepted Answer

(Firms that foster interdependence among their subsidiaries enjoy two important strategic advantages over firms that do not employ a coordinated global approach: (i) the ability to integrate scale-efficient operations; and (ii) the opportunity to cross-subsidize the losses in one market with the funds generated by profitable operations in other markets).

What Is the Primary Advantage of Operating Interdependent Subsidiaries