Which of the Following Statements Is Not Generally True of a Diversification

question 12

Multiple Choice

Which of the following statements is not generally true of a diversification strategy based on the realization of economies of scope?

• A) The strategy requires the head office to evaluate each business unit as a stand-alone operation.
• B) The strategy allows a company to realize cost economies among business units.
• C) The strategy may allow a company to use shared resources more intensively, thereby realizing economies of scale.
• D) The strategy requires managers to be aware of the costs of coordination.
• E) The strategy requires close coordination among different business units.

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