Final answer:
Managers of foreign subsidiaries making decisions that maximize the values of their respective subsidiaries do not automatically maximize the value of the entire corporation.
Step-by-step explanation:
The statement is False.
Managers of foreign subsidiaries are responsible for making decisions that maximize the value of their respective subsidiaries. While this may indirectly contribute to the overall value of the entire corporation, it does not guarantee automatic maximization of the entire corporation's value. Managers need to consider various factors, such as the impact on other subsidiaries and the overall corporate strategy, when making decisions.
For example, a manager of a foreign subsidiary may make decisions that maximize profit for their subsidiary, but these decisions may not align with the strategic goals of the entire corporation or may negatively affect other subsidiaries. Therefore, it is important for managers to have a broader perspective and consider the overall corporate value when making decisions.