A Company Should Pursue Related Diversification Instead of Unrelated Diversification

question 74

Multiple Choice

A company should pursue related diversification instead of unrelated diversification when the company's:

• A) core skills are applicable to a wide variety of industrial and commercial situations.
• B) core skills are highly specialized and have few applications outside the core business.
• C) top managers are skilled at acquiring and turning around poorly run enterprises.
• D) main objective is to maximize its growth.
• E) free cash flow is high enough that it has funds available for investment.

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Definitions:

Sigmund Freud

Austrian neurologist and the founder of psychoanalysis, a clinical method for treating psychopathology through dialogue between a patient and a psychoanalyst.

John Watson

An American psychologist who established the psychological school of behaviorism, emphasizing the study of observable behavior.

Abraham Maslow

An American psychologist known for creating Maslow's hierarchy of needs, a theory of psychological health predicated on fulfilling innate human needs in priority, culminating in self-actualization.

Carl Jung

A Swiss psychiatrist and psychoanalyst who founded analytical psychology, known for his theories of the Collective Unconscious and archetypes.