Which of the Following Statements Is True Regarding Unrelated Diversification

question 49

Multiple Choice

Which of the following statements is true regarding unrelated diversification?

• A) The bureaucratic costs associated with managing unrelated diversification are much greater than those associated with related diversification.
• B) An organization pursuing a strategy of unrelated diversification tries to obtain value by sharing resources or by transferring functional skills from one division to another.
• C) Organizations with a strategy of unrelated diversification are likely to use a conglomerate structure.
• D) Considerably more communication and coordination are needed to create value from unrelated diversification than from related diversification.

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Definitions:

Understocks

This term describes a situation where the inventory levels are lower than the demand, potentially leading to lost sales and customer dissatisfaction.

Produce Efficiently

The process of producing goods or services in a way that minimizes costs and waste while maximizing output and quality.

Unregulated Monopoly

A market structure where a single supplier dominates without any government intervention or regulatory constraints.

Output

The quantity of products or services produced and provided by an entity, reflecting its productivity levels.