As the threat of corporate failure increases due to relatedness between a firm's business units, firms may decide to:
A) increase the firm's level of retained resources.
B) diversify into less risky environments.
C) reduce the level of diversity in its investments.
D) pursue unproven product lines.

Question

Quizplus · Accepted Answer

Diversifying into less risky environments can help mitigate the risk associated with the relatedness of business units, as it spreads the risk across different markets or industries.

As the Threat of Corporate Failure Increases Due to Relatedness