In Which of the Following Cases Are Bureaucratic Costs Likely

question 67

Multiple Choice

In which of the following cases are bureaucratic costs likely to be lowest?

• A) A vertically integrated company with five divisions that pursues full integration
• B) A company with five divisions that pursues related diversification based on economies of scope
• C) A company with five divisions that pursues related diversification based on transferring competencies
• D) A company with five divisions that pursues unrelated diversification based on acquisitions and restructuring
• E) A company with twenty divisions that pursues taper integration

---

Definitions:

Primary Market

The financial market where new securities are issued and sold for the first time.

Regulatory Dialectic

The pressures financial institutions and regulatory bodies exert on each other.

Market Value

The rate at which the market currently allows the buying or selling of a service or asset.

Firm's Equity

The value of a company owned by its shareholders, representing the residual assets of the company after debts have been subtracted.