When a Corporation Pursues a Related-Constrained Diversification Strategy, Financial Controls

question 46

Multiple Choice

When a corporation pursues a related-constrained diversification strategy, financial controls may not add value to strategy implementation efforts since it is difficult to

• A) use them without reducing cooperation among divisional managers.
• B) transfer capital between units.
• C) maintain an arms-length relationship between headquarters and the divisions.
• D) identify which objective criteria to monitor.

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Definitions:

Technological Controls

Systems and procedures implemented to secure technology infrastructure and manage information assets effectively.

Recordkeeping

The process of maintaining accurate and systematic records of financial transactions and other business events.

Custody of Assets

Holding and safeguarding of assets or securities by a financial institution or an individual on behalf of the owner.

Responsibilities

Duties or obligations assigned to individuals or organizations, requiring them to act in certain ways or achieve specific outcomes.