A Company Should Pursue Related Diversification Instead of Unrelated Diversification

question 48

Multiple Choice

A company should pursue related diversification instead of unrelated diversification when the company's

• A) core skills are applicable to a wide variety of industrial and commercial situations.
• B) core skills are highly specialized and have few applications outside the core business.
• C) top managers are skilled at acquiring and turning around poorly run enterprises.
• D) main objective is to maximize growth.
• E) free cash flow is high enough that it has funds available for investment.

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Definitions:

Discrimination

The unjust or prejudicial treatment of different categories of people or things, especially on the grounds of race, age, or gender.

Normative Social Influence

The compelling influence of companions or society that leads us to change our demeanor to be welcomed and liked by them.

Ingroup Bias

The tendency to favor and extend loyalty to members of one's own group over others.

Microaggressions

Everyday verbal, nonverbal, and environmental slights, snubs, or insults, whether intentional or unintentional, that communicate hostile, derogatory, or negative messages to target persons based solely upon their marginalized group membership.