Question

Which of the following is/are a form of business organization that concentrates financial management and control out of a central home base while decentralizing production, sales, and marketing operations to units in other countries?

Answer 1

Answer:

The Multinational strategy

Explanation:

The reason is that the strategy that includes the management of company that operates in a number of countries which includes its financial management and operational controls procedures in the other countries. The multinational organization always pursue multinational strategy because it faces greater number of risks and this strategy helps the country to manage the risks internationally. Lets take an example of a company that made investment in UK of $5 million which due to weakening of UK sterling is worth $4.5 million. Though the company made a great increase in profits but the risk of loss of the value investment is higher. So there are a lot of such types of risks that the company needs to manage. To manage risk of an multinational organization, the company uses Multinational strategy.