Which of the following best describes the motive for appointing a host-country national as head manager in a MNE subsidiary?
A) They are familiar with the intricate workings of the MNE.
B) They are independent of the local traditions and MNE so act as a neutral leader.
C) They are familiar with the local informal institutions and market.
D) Host-country nationals are never appointed as head manager.

Question

Quizplus · Accepted Answer

Appointing a host-country national as head manager in a MNE subsidiary allows them to leverage their familiarity with the local informal institutions and market, which can be advantageous for the subsidiary's success. They also typically have a better understanding of the cultural nuances and can help bridge the gap between the subsidiary and the local community. Host-country nationals are familiar with the local informal institutions and market, which can be crucial for successful operations of the MNE subsidiary. This local knowledge can help the subsidiary navigate complex regulatory and cultural environments, and effectively compete with local firms. Additionally, appointing a local manager can also help build relationships with local stakeholders, such as suppliers and customers, which can be beneficial for the MNE's long-term success.

Which of the Following Best Describes the Motive for Appointing