Diversification Merits Strong Consideration Whenever a Single-Business Company

question 78

Multiple Choice

Diversification merits strong consideration whenever a single-business company:

• A) has integrated backward and forward as far as it can.
• B) is faced with diminishing market opportunities and stagnating sales in its principal business.
• C) has achieved industry leadership in its main line of business.
• D) encounters declining profits in its mainstay business.
• E) faces strong competition and is struggling to earn a good profit.

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Definitions:

ERG Theory

A theory of human motivation that categorizes needs into three categories: Existence, Relatedness, and Growth, suggesting that more than one need can be operative at the same time.

Expectancy Theory

A motivational theory stating that an individual's motivation is influenced by the belief that effort will lead to performance and performance will lead to desired rewards.

E-to-P Expectancies

The belief about the probability that putting effort into a task will lead to achieving performance objectives.

Emotional Markers

Psychological indicators that relate to an individual's emotional state or changes, often influencing decision-making and behavior.