The Three Tests for Judging Whether a Particular Diversification Move

question 22

Multiple Choice

The three tests for judging whether a particular diversification move can create value for shareholders are the

• A)industry attractiveness test,the profitability test,and the shareholder value test.
• B)strategic fit test,the competitive advantage test,and the return on investment test.
• C)resource fit test,the profitability test,and the shareholder value test.
• D)attractiveness test,the cost-of-entry test,and the better-off test.
• E)shareholder value test,the cost-of-entry test,and the profitability test.

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Definitions:

Cohesiveness

The degree to which members of a group or team are united in pursuing their common goals and how much they are attracted to the group or team.

GLOBE Model

A research framework used for understanding the relationship between culture and societal, organizational, and leadership effectiveness across the world.

Collectivism-societal

An orientation valuing the goals, well-being, and views of the group over those of the individual, prevalent in various cultures and societies.

Cohesiveness

The degree to which members of a group or team are united in pursuing common goals, leading to a sense of unity and loyalty.