The Risk for Firms That Follow the Unrelated Diversification Strategy

question 81

Multiple Choice

The risk for firms that follow the unrelated diversification strategy in developed economies is that:

• A) external investors tend to dump the stocks of conglomerates during economic downturns.
• B) conglomerates are typically owned by one powerful entrepreneur and do not survive his/her retirement or death.
• C) government regulations, especially in Europe, have periodically forced the dissolution of conglomerates.
• D) competitors can imitate financial economies more easily than they imitate economies of scope.

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Definitions:

Babies

Very young infants, typically considered to be in the age range from birth to 12 months.

Role Strain

Tension or stress experienced by an individual when facing difficulty in fulfilling different roles or expectations in life.

Realistic Role Expectations

Practical and achievable expectations society, groups, or individuals hold regarding the roles performed by persons or entities in specific contexts.

Socialize Babies

The process of teaching infants and young children the norms, customs, values, and behaviors considered appropriate in their society.