Which of the Following Is Not One of the Suggested

question 60

Multiple Choice

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

• A) ability to spread business risk over truly diverse businesses (as compared to related diversification,which is limited to spreading risk only among businesses with strategic fit)
• B) ability to employ the company's financial resources to maximum advantage by investing in whatever industries/businesses offer the best profit prospects
• C) ability to capture cross-business strategic fit with which to capture added competitive advantage and few managerial demands
• D) 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) potential to grow shareholder value by investing in bargain-priced companies with big upside profit potential

Understand key considerations and conditions for establishing effective incentive systems.

Identify various types of compensation and incentive plans and their appropriate applications.

Comprehend the concepts of variable pay and how it links to employee performance.

Recognize potential consequences and challenges of implementing incentive plans, including issues like rate busting.