Which of the following will most likely harm a MNE's reputation?
A) Principal-agent problems cause a MNE to merge with another MNE.
B) Increased competition causes a MNE to close a factory in a developing country.
C) Wages for workers in a factory owned by a MNE increase, causing profits to decline.
D) A sweatshop owned by a MNE has an explosion that kills hundreds of workers.

Question

Quizplus · Accepted Answer

The explosion in a sweatshop will most likely harm a MNEs reputation because sweatshops are known for having poor working conditions and low wages. Therefore, for an MNE to use a sweatshop lowers their reputation. Having an explosion that kills hundreds of workers in the sweatshop will harm the MNE's reputation even more.

Which of the Following Will Most Likely Harm a MNE's