Retrenching to a Narrower Diversification Base

question 48

Multiple Choice

Retrenching to a narrower diversification base:

• A) is usually the most attractive long-run strategy for a broadly diversified company confronted with recession,high interest rates,mounting competitive pressures in several of its businesses,and sluggish growth.
• B) is a strategy that allows a diversified firm's energies to be concentrated on building strong positions in a smaller number of businesses rather the stretching its resources and managerial attention too thinly across many businesses.
• C) is an attractive strategy option for revamping a diverse business lineup that lacks strong cross-business financial fit.
• D) is sometimes an attractive option for deepening a diversified company's technological expertise and supporting a faster rate of product innovation.
• E) is a strategy best reserved for companies in poor financial shape.

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Definitions:

Illusory Correlation

Perceiving a relationship where none exists, or perceiving a stronger-than-actual relationship.

Confirmation Bias

The tendency to search for, interpret, favor, and recall information in a way that confirms one's preexisting beliefs or hypotheses, while giving disproportionately less consideration to alternative possibilities.

Mental Health

a state of well-being in which an individual realizes their own abilities, can cope with the normal stresses of life, work productively, and is able to make a contribution to their community.

Evidence-based Practice

The integration of clinical expertise, patient values, and the best research evidence into the decision-making process for patient care.