For an Unrelated Diversification Strategy to Produce Financial Results Above

question 117

Multiple Choice

For an unrelated diversification strategy to produce financial results above that of stand-alone entities, executives must do all of the following EXCEPT

• A) diversify into businesses that can produce consistently good earnings and returns on investment and thereby satisfy the attractiveness test.
• B) negotiate favorable acquisition prices (to satisfy the cost of entry test).
• C) do a superior job of corporate parenting via high-level managerial oversight and resource sharing, financial resource allocation and portfolio management, or restructuring underperforming businesses (to satisfy the better-off test).
• D) satisfy the attractiveness test, the cost of entry test, and the better-off test.
• E) leverage the cross-business strategic fit advantage effectively.

---

Definitions:

Schwartz's Values Model

A theoretical model developed by Shalom H. Schwartz, representing universal human values as motivations and guiding principles for behavior.

Openness To Change

The willingness or propensity of individuals or organizations to adapt to new ideas, practices, or conditions.

Conservation

The act of preserving, protecting, or restoring natural resources and the environment.

Myers-Briggs Type Indicator

A psychological assessment tool that categorizes individuals into 16 personality types based on preferences in how they perceive the world and make decisions.