With a Strategy of Unrelated Diversification, an Acquisition Is Deemed

question 59

Multiple Choice

With a strategy of unrelated diversification, an acquisition is deemed to have potential if it

• A)can achieve at least existing profit margins into the near future.
• B)has the opportunity to generate positive buzz in the industry, even if it may not be able to contribute to the parent firm's bottom line.
• C)can pass the industry attractiveness test and the cost of entry test, and if it has good prospects for profit growth.
• D)can pass at least the industry attractiveness test if not the cost of entry test.
• E)can add economic value for managers.

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Definitions:

Moderate Risk

A level of danger or uncertainty that is considered to be within an acceptable range for undertaking certain actions or decisions.

Democratic Style

A style of leadership in which the leader uses interaction and collaboration with followers to direct the work and work environment.

Role Ambiguity

A condition in which an employee lacks clear information regarding their job responsibilities.

Discretionary Influence

The capacity to affect outcomes within an organization through the use of personal or informal power, beyond formal job requirements.