A large company diversifies by adding an entirely unrelated business or product to its organizational design. The new business or product is owned by the acquiring company. This is an example of a:
A) joint venture.
B) strategic alliance.
C) conglomerate.
D) divisional organizational design.

Question

Quizplus · Accepted Answer

A conglomerate is a type of company that consists of multiple, unrelated business units. When a large company diversifies by adding an entirely unrelated business or product to its organizational design, it becomes a conglomerate. Joint ventures and strategic alliances involve collaborations between two or more companies, while divisional organizational design refers to a structure where a company is divided into smaller operational units, often based on products or geographic regions.

A Large Company Diversifies by Adding an Entirely Unrelated Business