Porter's Three Tests Help to Determine

question 26

Multiple Choice

Porter's three tests help to determine:

• A)What the level of risk is for a potential diversification
• B)Whether diversification would create shareholders' value
• C)If top managers will benefit from diversification
• D)How the financial markets would react to a diversification

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Definitions:

Operational Definitions

Specific explanations of abstract concepts or variables in terms of the procedures or operations by which they are measured or manipulated.

Causal Relationships

A connection between two events where one event is understood to be a result of the occurrence of the other event.

Employment Success

The achievement of career objectives, personal satisfaction, and positive contributions to an organization or society through one's work.

Hindsight Bias

The tendency to believe, after an event has occurred, that one would have predicted or expected the outcome, also known as the "I-knew-it-all-along" effect.