Which of the following is correct about a decentralized management style of the financial management over foreign operations?
A) There is no monitoring of subsidiary managers, since an MNC's foreign subsidiaries are separate legal entities.
B) MNCs allow subsidiary managers to make the key decisions about their respective operations, but the decisions may be monitored by the parent's management.
C) Subsidiary foreign managers respond to directive from the top of the parent's management.
D) Financial managers at the parent company make most of the key decisions.

Question

Quizplus · Accepted Answer

In a decentralized management style of financial management over foreign operations, MNCs allow subsidiary managers to make the key decisions about their respective operations. However, these decisions may be monitored by the parent's management to ensure they align with overall company goals and strategies. It does not mean that there is no monitoring of subsidiary managers (option A) or that subsidiary foreign managers respond only to directives from the top of the parent's management (option C). Option D is also not correct as financial managers at the parent company may not make most of the key decisions in a decentralized management style.

Which of the Following Is Correct About a Decentralized Management