Certified Internal Auditor (CIA) Part 3: Business Knowledge for Internal Auditing — Question 11

In terms of international business strategy, which of the following is true regarding a multi-domestic strategy?

Answer options

• A. It uses the same products in all countries.
• B. It centralizes control with little decision-making authority given to the local level.
• C. It is an effective strategy when large differences exist between countries.
• D. It provides cost advantages, improves coordinated activities, and speeds product development.

Correct answer: C

Explanation

Option C is correct because a multi-domestic strategy is particularly effective when countries have distinct market needs and differences. The other options are incorrect as a multi-domestic strategy typically involves local adaptations of products (A), decentralizes decision-making to adapt to local markets (B), and doesn't focus on cost advantages or coordination as a primary goal (D).