When a Firm Simultaneously Practices Operational Relatedness and Corporate Relatedness

question 17

Multiple Choice

When a firm simultaneously practices operational relatedness and corporate relatedness:

• A) it is difficult for investors to observe the value created by the firm.
• B) the firm is likely to be overvalued by investors.
• C) the firm will suffer from diseconomies of scope that outweigh cost savings generated.
• D) the firm is seeking to create value through financial economies.

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Definitions:

Climate

The general environment or atmosphere within an organization, characterized by the collective attitudes, values, and behaviors of its members.

Grapevine Information

Informal communication that spreads quickly and is not officially sanctioned by organizational leadership.

Bond Of Trust

A foundational relationship built on reliability, integrity, and confidence between individuals or within a group.

Gossip

Informal or idle talk about others, typically involving details that are not confirmed as being true.