A Company Should Pursue Related Diversification Instead of Unrelated Diversification

question 74

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 its growth.
• E) free cash flow is high enough that it has funds available for investment.

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Definitions:

Marine Biologists

Scientists who study life in the oceans and other saltwater environments, including the behavior, physiology, and ecology of marine species.

Freshwater Systems

Ecosystems that are comprised of bodies of water like rivers, lakes, and wetlands, which have low salt concentration.

Economic Service

Activities or functions that have monetary value to individuals or society at large, such as pollination, clean water, and raw material provision.

Nutrient Cycling

The movement and exchange of organic and inorganic matter back into the production of living matter through processes such as decomposition.