When a corporation pursues a related-constrained diversification strategy,financial controls may not add value to strategy implementation efforts since it is difficult to:
A) evaluate the financial performance of individual business units and their managers.
B) transfer capital between units.
C) deal with the multiple responsibilities and authorities of division managers.
D) identify which objective criteria to monitor.

Question

Quizplus · Accepted Answer

In a related-constrained diversification strategy, the different business units are closely related to each other and share resources, technologies, and customers. It is difficult to evaluate the financial performance of each unit separately because they are interdependent. Therefore, financial controls may not be effective in adding value to strategy implementation efforts in this scenario.

When a Corporation Pursues a Related-Constrained Diversification Strategy,financial Controls May