Which of the following is true of a firm that tries to coordinate and control the worldwide operations of its subsidiaries?
A)The management personnel of its subsidiaries need to be fluent only in English.
B)The subsidiaries based in different countries never face any constraints on the transfer of corporate resources.
C)Cash flows in different subsidiaries are denominated in different currencies.
D)The terms of trade determined after negotiation with the host government and the multinational corporation are always well aligned to the firm's policies.
E)All the subsidiaries are based only in countries that have homogeneous cultural heritages.

Question

Quizplus · Accepted Answer

If a firm tries to coordinate and control its worldwide operations, it can face challenges with coordinating financial transactions across different countries where its subsidiaries are located. Thus, the cash flows in different subsidiaries might be denominated in different currencies, which creates complexities in financial management. The other answer choices do not apply to the situation described in the question.

Which of the Following Is True of a Firm That