The company can be classified as what type of enterprise?

A company originally based in Germany sets up companies in India, China, Vietnam, Mexico, and Brazil. It sources most of the raw materials locally and employs the local workforce to manage and produce finished goods. Most of the goods produced are consumed in the same country.

The company can be classified as what type of enterprise?

A. Globally integrated

B. Domestic

C. Multinational

D. Virtual

View Answer

Answer: C

Explanation:

A company that sets up operations in multiple countries, sources materials locally, employs a local workforce, and primarily consumes the goods within each local market can be classified as a multinational enterprise. Multinational companies operate in several countries but manage their operations and strategies based on local needs and market conditions. This structure allows them to benefit from local resources and market proximity while maintaining a global presence.

Globally integrated enterprises manage their operations as a single global entity with integrated processes across borders.

Domestic enterprises operate primarily within a single country’s borders.

Virtual enterprises operate primarily through digital means without significant physical presence.

Reference: Bartlett, C. A., & Beamish, P. W. (2011). "Transnational Management: Text, Cases & Readings in Cross-Border Management."

Hill, C. W. L., & Hult, G. T. M. (2019). "International Business: Competing in the Global Marketplace."