Forget paperwork! Multinationals fear the external: asset freezes, currency dips, profit locks. Contracts? Just routine, no chills there.
Out of the options you provided, the non-risk factor for a multinational company is A) Complying with contractual terms of agreements.
Risk factors for multinationals typically involve external factors beyond their control that can negatively impact their operations, profitability, or reputation. These can include political instability, economic fluctuations, cultural differences, and legal uncertainties.
Complying with contractual terms is an expected responsibility and standard business practice for any company, including multinationals. It's not a specific risk factor unique to their operating environment.
The other options, however, present potential risks for multinationals:
B) Freezing the movement of assets out of the host country: This could be imposed by the host government, restricting the company's ability to repatriate profits or reinvest in their operations.
C) Devaluing the currency: This can erode the value of the company's local earnings when converted back into their home currency.
D) Limiting the remittance of profits or capital: Similar to B, this restricts the flow of funds between the subsidiary and the parent company, impacting profit repatriation and financial flexibility.
Therefore, while all the options involve agreements or contractual obligations, only options B, C, and D introduce external risks that specifically affect multinationals due to their cross-border operations.
Q- Which of the following is not an example of risk factors for a multinational company?
A) Complying with contractual terms of agreements
B) Freezing the movement of assets out of the host country
C) Devaluing the currency
D) Limiting the remittance of profits or capital