The Number of Separate Businesses a Firm Operates and the Degree

question 48

Multiple Choice

The number of separate businesses a firm operates and the degree of ________ of those businesses increase a firm's level of diversification.

• A) economy of scale
• B) relatedness
• C) diversity
• D) management

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Definitions:

Bureaucratic Hierarchy

An organizational structure with clear levels of authority and a fixed set of rules and procedures to control operations and decision-making.

Membership and Seniority-based Pay

A compensation strategy where an employee's earnings are determined by their length of service and membership in an organization, rather than performance or skills.

Skill-based Pay Plans

Compensation strategies that reward employees based on the range, depth, or level of skills and competencies they demonstrate, rather than their job title or position.

Psychological Distance

The perception of an object, idea, or situation as being removed from the immediate sensory experience, affecting cognition and decision-making.