Which of the following is a value-reducing reason for diversification?
A)enhancing the strategic competitiveness of the entire company
B)expanding the business portfolio in order to diversify managerial employment risk
C)gaining market power relative to competitors
D)conforming to antitrust regulation

Question

Quizplus · Accepted Answer

Diversifying the business portfolio solely for the purpose of reducing managerial employment risk may not create any strategic or financial value for the company. This can result in the company spreading too thin and losing focus on its core competencies, ultimately reducing its overall value.

Which of the Following Is a Value-Reducing Reason for Diversification