Which of the Following May Be True for a Company

question 17

Multiple Choice

Which of the following may be true for a company pursuing a strategy of unrelated diversification rather than a strategy of related diversification?

• A) The company has to achieve coordination between business units.
• B) The company has narrow organizational competencies.
• C) The company has superior strategic management and organizational design.
• D) The company has no bureaucratic costs that arise from the number of businesses in its portfolio.
• E) The company has no difficulty in keeping its corporate managers informed about the complexitities of each business.

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Definitions:

Net Income

The amount of profit remaining after all operating expenses, taxes, and interest are deducted from total revenue.

Cash Investment

Funds that are invested in assets that can be quickly turned into cash, or the act of putting money into financial schemes, shares, property, or a commercial venture with the expectation of achieving a profit.

Equipment Sale

The process of selling off business-owned equipment, either to upgrade to newer assets or to liquidate assets for cash.

Cash Dividend

A payment made by a company out of its earnings to its shareholders in cash.