Question

Agency costs faced by MNCs may be larger than those faced by purely domestic firms because: a.monitoring of managers located in foreign countries is more difficult AND foreign subsidiary managers raised in different cultures may not follow uniform goals. b.monitoring of managers located in foreign countries is more difficult. c.MNCs are relatively large. d.foreign subsidiary managers raised in different cultures may not follow uniform goals. e.All of these are correct.

Answer 1

Agency costs faced by MNCs may be larger than those faced by purely domestic firms because:

• monitoring of managers located in foreign countries is more difficult AND foreign subsidiary managers raised in different cultures may not follow uniform goals.
• monitoring of managers located in foreign countries is more difficult.
• .MNCs are relatively large.
• foreign subsidiary managers raised in different cultures may not follow uniform goals.

What are multinational corporations?

Multinational corporations can be regarded as one that have the license to operates in more than one country at a time.

Agency costs faced by MNCs may be larger than those faced by purely domestic firms due to how foreign subsidiary managers raised in different cultures may not follow  uniform goals.

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