The agency costs of an MNC are likely to be lower if it:
A)scatters its subsidiaries across many foreign countries.
B)increases its volume of international business.
C)uses a centralized management style.
D)A and B.

Question

Quizplus · Accepted Answer

A centralized management style allows for better control and coordination of the MNC's operations, reducing the likelihood of agency costs stemming from communication and coordination issues. Scattering subsidiaries can result in greater distances and cultural differences, making coordination and control more difficult. Increasing volume of international business does not necessarily impact agency costs.

The Agency Costs of an MNC Are Likely to Be