When divesting a particular strategic business unit,a company ________.
A)focuses on gaining short-term cash flow regardless of long-term concerns
B)invests more in the business unit to build its market share
C)sells off or phases out the strategic business unit
D)invests just enough in the strategic business unit to keep its market share at the current level
E)gradually increases investment in the strategic business unit over time, to maximize profits

Question

Quizplus · Accepted Answer

When a company decides to divest a particular strategic business unit, it means they are looking to sell off or phase out that unit. This is often done to reduce costs, streamline operations, and focus on core competencies. Option A is incorrect as the focus is on long-term concerns, not short-term cash flow. Option B is incorrect as it suggests investing more in the unit, which goes against the objective of divesting. Option D is incorrect as the company may not want to invest any further in the unit. Option E may not be feasible as the company has already decided to divest the unit.

When Divesting a Particular Strategic Business Unit,a Company ________