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Many multinational corporations require their young executives to work within overseas subsidiaries. This is believed to be a risk treatment strategy to manage?Group of answer choicesTechnological risk.Economic risk.Political riskSocio-cultural risk.

Question

Many multinational corporations require their young executives to work within overseas subsidiaries. This is believed to be a risk treatment strategy to manage?Group of answer choicesTechnological risk.Economic risk.Political riskSocio-cultural risk.

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Solution

The requirement for young executives to work within overseas subsidiaries can be seen as a risk treatment strategy to manage several types of risks. Here's a breakdown of how it can help manage each risk:

  1. Technological risk: By working in different countries, executives can gain firsthand experience with the technology and systems used there. This can help them understand the technological risks that the company might face in those countries.

  2. Economic risk: Different countries have different economic conditions. By working overseas, executives can gain a better understanding of these conditions and the economic risks associated with them.

  3. Political risk: Political conditions can greatly affect a company's operations in a country. By working in a country, executives can gain a better understanding of the political climate and how it might pose a risk to the company.

  4. Socio-cultural risk: Different countries have different cultures and social norms. By working in a country, executives can gain a better understanding of these norms and how they might affect the company's operations.

So, the requirement for young executives to work within overseas subsidiaries can be seen as a risk treatment strategy to manage all of these risks. However, the most direct impact would likely be on managing socio-cultural risk, as this involves understanding and navigating the social norms and cultural practices of a different country, which can be best learned through direct experience.

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