When a firm diversifies,top management may be:
A) Eliminated altogether
B) Burdened with too many tasks, including running the day-to-day business
C) Excluded from strategic decision making
D) Confronted with excessive coordination demands

Question

Quizplus · Accepted Answer

When a firm diversifies, top management may be confronted with excessive coordination demands because they now have to manage multiple business units with different products, customers, and markets. They need to ensure that these units work together instead of competing against each other, which requires extra coordination and communication efforts from top management. Eliminating top management altogether or excluding them from strategic decision making would not be advisable as they play a crucial role in overseeing the diversification process and ensuring its success. Burdening them with too many tasks could lead to burnout and ineffective leadership.

When a Firm Diversifies,top Management May Be