Which of the Following Statements Is NOT Generally True of a Diversification

question 51

Multiple Choice

Which of the following statements is NOT generally true of a diversification strategy based on the realization of economies of scope?

• A) The strategy requires the head office to evaluate each business unit as a stand-alone operation.
• B) The strategy allows a company to realize cost economies among business units.
• C) The strategy may allow a company to use shared resources more intensively, thereby realizing economies of scale.
• D) The strategy requires managers to be aware of the costs of coordination.
• E) The strategy requires close coordination among different business units.

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Definitions:

Motion Studies

The systematic analysis of work processes and movements to increase efficiency, reduce waste, and improve productivity.

Unity of Command

A principle in management and military that states an individual should receive orders from only one superior.

Henri Fayol

A French engineer and theorist, known for his development of general theories in business administration and management.

Management Order

A directive issued by managers in an organization to guide or control the actions of teams or individuals toward achieving business objectives.