Why Would One Organization Want to Purchase an SBU That

question 50

Multiple Choice

Why would one organization want to purchase an SBU that has been classified as a "dog"?

• A) A need to generate large amounts of short-run cash
• B) A desire to expand into a rapidly growing market
• C) Possible synergistic effects on the buying organization
• D) A decision to adopt a retrenchment strategy
• E) A desire to complete a hostile takeover of the seller

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Definitions:

Co-action Effects

The phenomenon where the presence of others performing the same task can affect an individual's performance, often enhancing it.

Primacy Effect

A cognitive bias that results in a person recalling items or information presented at the beginning of a list better than those in the middle or end.

Low-ball Technique

A persuasion tactic in which an initially favorable deal is later altered to become less favorable to the individual who agreed to it.

Foot-in-the-door Technique

A persuasion strategy in which agreement to a small, initial request increases the likelihood of compliance with a larger, later request.