Which statement about multinational enterprises is true?

Which statement about multinational enterprises is true?

• A. They have no headquarters
• B. They operate in multiple host countries
• C. They only hire local management
• D. They are exclusively based in one region

Answer: (B)

Multinational enterprises, by definition, have operations in multiple countries beyond their home base. This characteristic allows them to tap into various markets, access diverse resources, and optimize their supply chains across borders. Operating in multiple host countries enables these enterprises to overcome barriers such as trade regulations, local consumer preferences, and logistical considerations, which can lead to competitive advantages. The other statements do not accurately describe multinational enterprises. For instance, having no headquarters contradicts the typical structure of a multinational, as these enterprises usually have a central management and operational base, often in one of their largest markets. Similarly, while they may hire local talent, they do not restrict themselves to only local management; rather, they often employ a mix of local and expatriate staff to leverage international expertise. Lastly, a multinational enterprise is defined by its operations in more than one region, making the assertion that it is exclusively based in one region inaccurate.

Multinational enterprises, by definition, have operations in multiple countries beyond their home base. This characteristic allows them to tap into various markets, access diverse resources, and optimize their supply chains across borders. Operating in multiple host countries enables these enterprises to overcome barriers such as trade regulations, local consumer preferences, and logistical considerations, which can lead to competitive advantages.

The other statements do not accurately describe multinational enterprises. For instance, having no headquarters contradicts the typical structure of a multinational, as these enterprises usually have a central management and operational base, often in one of their largest markets. Similarly, while they may hire local talent, they do not restrict themselves to only local management; rather, they often employ a mix of local and expatriate staff to leverage international expertise. Lastly, a multinational enterprise is defined by its operations in more than one region, making the assertion that it is exclusively based in one region inaccurate.