A decentralized management style of MNC results in relatively high agency costs.

Question

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When a multinational corporation (MNC) adopts a decentralized management style, it gives more autonomy to its subsidiaries in different countries. This can result in higher agency costs as each subsidiary may have its own objectives and may not always act in the best interest of the overall MNC. The headquarters may have difficulty monitoring and controlling the actions of each subsidiary, which can result in higher costs to ensure alignment with the MNC's strategy and goals.

A Decentralized Management Style of MNC Results in Relatively High