Which of the Following Is Not One of the Appeals

question 82

Multiple Choice

Which of the following is not one of the appeals of an unrelated diversification strategy?

• A) The ability to spread business risk over truly diverse industries (as compared to related diversification which is limited to spreading risk only among businesses with strategic fit)
• B) An ability to employ the company's financial resources to maximum advantage by investing in whatever industries/businesses offer the best profit prospects
• C) Superior top management ability to cope with the wide variety of problems encountered in managing a broadly diversified group of businesses
• D) A potential for achieving somewhat more stable corporate sales and profits over the course of economic upswings and downswings (to the extent the company diversifies into businesses whose ups and downs tend to occur at different times)
• E) The potential to grow shareholder value by investing in bargain-priced or struggling companies with big upside profit potential, turning their operations around fairly quickly with infusions of cash and managerial know-how, and then riding the crest of higher profitability

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Definitions:

Legitimate Power

Power based on the position a person holds in an organization that is effective only when followers believe in the structure that produces this power.

Informal Group

A group formed naturally with no official structure or formal recognition, often based on personal relationships.

Group Process

The sequence of dynamic interactions and developments that occur within a group setting over time.

Group Development

The phases or stages a group goes through as it forms, progresses, and possibly disbands, including forming, storming, norming, performing, and adjourning.