A Company Should Pursue Related Diversification Instead of Unrelated Diversification

question 75

Multiple Choice

A company should pursue related diversification instead of unrelated diversification when

• A) the company's core skills create value by resource sharing and by transferring competencies between businesses.
• B) the company's core skills are highly specialized and have few applications outside the core business.
• C) the company's top management is skilled at acquiring and turning around poorly run enterprises.
• D) the company's main objective is to maximize growth.
• E) the company's free cash flow is high enough to have funds available for investment.

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Definitions:

Patience

The capacity to accept or tolerate delay, problems, or suffering without becoming annoyed or anxious.

Planning

The process of making detailed strategies and arrangements for achieving specific goals or completing tasks.

Stakeholder Model

A framework used in business that identifies and addresses the interests and concerns of individuals and groups affected by the organization's actions.

Social Responsibility

The obligation of individuals and organizations to act in ways that benefit society at large, beyond their own interests or profits.