IB Business Management 1.6 Multinational Companies Questionbank

EcoCrate Ltd.

EcoCrate Ltd. manufactures eco-friendly modular furniture. Management is considering two options: buying prefabricated parts from a supplier (CTB) or making parts internally (CTM). They are also assessing lean production methods and ways to reorganize production internationally.

Table 1: Financial and Production Data for EcoCrate Ltd.

Additional notes:

• Moving production offshore would reduce variable costs by 20%.
• Labour turnover after recent changes has risen to 20%.

Elevate Health Tech (EHT)

Resource 1 – Background of the organization

Elevate Health Tech (EHT) is a social enterprise based in Peru. Founded in 2021 by two biomedical engineers, it develops low-cost, portable diagnostic devices (such as digital stethoscopes and glucose meters) for use in rural and underserved communities across Latin America. EHT reinvests all profits into R&D and local employment programs.

EHT has grown quickly, scaling from 5 to 38 employees in two years. It operates as a private limited company, with both founders holding equal ownership and decision-making authority.

Resource 2 – Statement from the HR Director

"Our team is motivated by our mission, but we’re facing growing pains. We’ve recently hired 12 new staff, many with limited technical background. We have no formal training programme or organizational structure. Employees report confusion about job roles, and productivity varies significantly across teams. The co-founders are very hands-on, but this is becoming unsustainable."

Resource 3 – Loan proposal from the Development Impact Bank (DIB)

DIB is prepared to offer EHT a $750,000 low-interest loan to expand production and distribution across four Andean countries. The loan would cover machinery upgrades and recruitment but requires EHT to submit quarterly financial statements and maintain a current ratio of at least 1.5 throughout the term.

A grace period of 18 months will apply before repayments begin.

WKM

WKM is a fast-growing agritech company that produces modular irrigation systems for small-scale farms. The company is exploring international expansion through partnerships with cooperatives in developing countries.

As part of this move, the board is reviewing WKM’s current vision and mission statements to ensure they reflect its long-term goals and social impact values. Some directors have raised concerns about how operations in lower-income regions could affect the brand’s reputation and stakeholder expectations.

WKM is also considering changing its accounting method for depreciation—from straight-line to units of production—to better reflect asset usage across regions. This change could impact financial statements, employee bonuses, and decision-making around asset replacement.

Management is evaluating whether the shift aligns with its strategic goals and provides more accurate cost control as the company scales globally.

HydroGlow Ltd.

HydroGlow Ltd. is a fast-growing manufacturer of smart hydration devices. Founded by two engineers, it recently expanded into Southeast Asia and North America, marking its transition into a multinational company (MNC). Its business objective is to grow sustainably while maintaining high product innovation and employee well-being.

Due to expansion, the company adopted a divisional organisational structure, with separate regional heads managing operations. However, concerns have emerged about inconsistent leadership styles and uneven motivation levels across regional teams. Some managers use autocratic approaches to meet targets, while others encourage more inclusive practices.

HydroGlow Ltd. secured venture capital and a long-term loan to finance its growth, but now faces rising fixed costs and pressure to deliver strong returns. The finance team has compiled the following performance data from one of its new regional divisions.

Table 1: Financial data for HydroGlow Ltd. – Q1 2024 (North American Division)

Global Beans Ltd. (GBL)

Global Beans Ltd. (GBL) is a multinational company (MNC) that sources, roasts, and sells premium coffee in over 30 countries. The company started as a family-run business and experienced rapid internal growth before expanding overseas through joint ventures and franchising.

GBL recently released its final accounts. Table 1 shows selected financial data.

Table 1: Selected financial data for GBL