Diversification is sometimes pursued by a company for the wrong reasons.Which of the following is a faulty justification for diversification?
A)Risk pooling
B)Rescuing the core business from difficulty
C)Growth for growth's sake
D)All of the above
E)None of these choices

Question

Quizplus · Accepted Answer

All of the above reasons are faulty justifications for diversification. Risk pooling should not be the primary motive for diversification, rescuing the core business from difficulty through diversification is often unsuccessful, and growth for growth's sake can lead to an unfocused business strategy. Diversification should be pursued only if it adds value to the company and enhances its competitive advantage.

Diversification Is Sometimes Pursued by a Company for the Wrong