Managerial motives to diversify their organizations include all except
A) to increase their compensation by increasing the organization's size.
B) to reduce the risk of total failure of the firm.
C) to reduce the challenge of managing the organization.
D) to make their job more secure.

Question

Quizplus · Accepted Answer

Diversification actually increases the challenge of managing an organization, as it involves dealing with multiple businesses and industries. Therefore, reducing the challenge of managing the organization is not a motive for diversification. The other options (A, B, D) are valid managerial motives for diversification. A manager may want to increase the organization's size to increase their compensation, reduce the risk of total failure of the firm by spreading it across multiple businesses or industries, and make their job more secure by demonstrating their ability to effectively manage a diverse portfolio of businesses.

Managerial Motives to Diversify Their Organizations Include All Except