In making a decision to diversify, managers should use value-creating reasons or face the risk that their firms will be acquired and they could lose their jobs.Which of the following is a value-creating reason to diversify?
A) Economies of scope
B) Desire for increased compensation
C) Reduced managerial risk
D) Low performance

Question

Quizplus · Accepted Answer

Economies of scope is a value-creating reason to diversify as it involves leveraging core competencies or sharing resources across different businesses to create additional value.

In Making a Decision to Diversify, Managers Should Use Value-Creating