Price and profit allocation decisions are usually best made:
A) at the subsidiary headquarters.
B) at the IC headquarters.
C) cooperatively by both subsidiary and IC headquarters.
D) at the subsidiary headquarters in the host country with the lowest prices.

Question

Quizplus · Accepted Answer

Price and profit allocation decisions are usually best made at parent-company headquarters, which is supposed to maintain the overall view, looking out for the best interests of the enterprise as a whole. Naturally, however, subsidiary management does not gladly make decisions to accept lower profits, largely because its evaluation may suffer as a result of the apparent reduction in performance.

Price and Profit Allocation Decisions Are Usually Best Made