The downside of synergy in a diversified firm is:
A) increasing independence of businesses.
B) the reduction of activity sharing.
C) excessive focus on risky innovation.
D) the loss of flexibility.

Question

Quizplus · Accepted Answer

Synergy in a diversified firm can lead to the loss of flexibility. This is because the firm becomes too reliant on the benefits of integration and may struggle to adapt to changes in the market or adjust its strategy for individual business units. As a result, it can be harder for the firm to respond quickly to new opportunities or challenges, which can reduce its competitiveness and overall performance.

The Downside of Synergy in a Diversified Firm Is