Which of the Following May Be True for a Company

question 2

Multiple Choice

Which of the following may be true for a company pursuing a strategy of unrelated diversification rather than a strategy of related diversification?

• A) The company must achieve coordination between business units.
• B) The company has narrow organizational competencies.
• C) The company has superior strategic management and organizational design.
• D) The company has no bureaucratic costs that arise from the number of businesses in its portfolio.
• E) The company has no difficulty in keeping its corporate managers informed about the complexities of each business.

---

Definitions:

Diminishing Marginal Utility

The principle that as a person consumes more of a good, the satisfaction (utility) gained from consuming an additional unit decreases.

Total Satisfaction

The total amount of pleasure or utility that a consumer receives from consuming a certain quantity of goods or services.

Utility-Maximizing

The process of adjusting consumption of goods and services to achieve the highest possible level of satisfaction or utility.

Satisfaction

Describes the feeling of fulfillment or pleasure that comes from acquiring or consuming a product or service.