Hewlett-Packard has a large corporate center, while Berkshire Hathaway employs around 50 people. The cause of this is:
A)HP has mediocre profitability
B)Berkshire Hathaway has mediocre profitability
C)HP's is a divisional business where each unit has many links with each other and the center, while BH is a financial holding company
D)Warren Buffett runs a tighter ship than HP

Question

Quizplus · Accepted Answer

HP operates as a divisional business with many interconnections between units and the corporate center, while Berkshire Hathaway is a financial holding company. This is the reason for the difference in size of their corporate centers. The profitability of the companies is not a relevant factor in this context. The last option is also not applicable as it does not provide a plausible reason for the difference in corporate center size.

Hewlett-Packard Has a Large Corporate Center, While Berkshire Hathaway Employs