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