1.6 Multinational companies (MNCs): Practice Questions

• a.

  It exclusively sells products within its country of origin.

• b.

  It primarily focuses on non-profit activities globally.

• c.

  Its ownership is limited to a single individual.

• d.

  It operates in at least two countries.

• a.

  Standardization primarily benefits local suppliers in host countries, while localization only benefits the MNC through higher profit margins.

• b.

  The localized approach ensures consistency in brand image globally but significantly increases operational complexity and production costs.

• c.

  The standardized approach maximizes economies of scale but risks cultural insensitivity and failure to meet local consumer needs.

• d.

  Both approaches typically lead to similar levels of market acceptance, making the choice primarily dependent on the host country's regulatory framework.

• a.

  The host government may implement stricter tax audits and regulatory oversight on the MNC.

• b.

  The local community will see a direct increase in infrastructure development funded by the MNC.

• c.

  The MNC will experience an immediate increase in global brand loyalty from ethical consumers.

• d.

  The MNC will receive subsidies from the host government to encourage further investment.

Write your answer out first, then check it against the worked solution.

Write your answer out first, then check it against the worked solution.

Write your answer out first, then check it against the worked solution.