In Making a Decision to Diversify, Managers Should Use Value-Creating

question 85

Multiple Choice

In making a decision to diversify, managers should use value-creating reasons or face the risk that their firms will be acquired and they could lose their jobs.Which of the following is a value-creating reason to diversify?

• A) Economies of scope
• B) Desire for increased compensation
• C) Reduced managerial risk
• D) Low performance

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Definitions:

Productivity

Refers to the amount of goods or services produced for every hour worked.

Quality Circles

Groups of workers who voluntarily come together to solve problems and improve work processes and quality in their organization.

Bureaucratic Inertia

The tendency of bureaucratic organizations to resist change and continue with established procedures, often leading to inefficiency or outdated practices.

Laissez-Faire Leadership

Allows subordinates to work things out largely on their own, with almost no direction from above. It is the least effective type of leadership.