Consider two different foreign subsidiaries of Georgia-Pacific Wood Products Inc. The first subsidiary mills trees in Canada and ships its entire product to the Georgia-Pacific U.S. The second subsidiary is also owned by the parent firm but is located in Japan and retails tropical hardwood furniture that it buys from many different sources. The first subsidiary is likely a/an ________ foreign entity with most of its cash flows in U.S. dollars, and the second subsidiary is more of a/an ________ foreign entity.
A) domestic; integrated
B) self-sustaining; domestic
C) integrated; self-sustaining
D) self-sustaining; integrated

Question

Quizplus · Accepted Answer

The first subsidiary, which mills trees in Canada and ships its entire product to the Georgia-Pacific U.S., is an integrated foreign entity since it is closely tied to the parent company's operations and has most of its cash flows in U.S. dollars.

The second subsidiary, which retails tropical hardwood furniture that it buys from many different sources in Japan, is a self-sustaining foreign entity since it operates independently and sources its products from various suppliers.

Consider Two Different Foreign Subsidiaries of Georgia-Pacific Wood Products Inc