Diversified public corporations such as Berkshire Hathaway and Virgin Group are examples of companies that create value using
A) deconstruction expertise.
B) parenting expertise.
C) excess personnel.
D) increased market positioning.

Question

Quizplus · Accepted Answer

Many firms have successfully diversified their holdings without strong evidence of the more traditional sources of synergy (i.e., horizontally across business units). Diversified public corporations such as Berkshire Hathaway and Virgin Group and leveraged buyout firms such as KKR and Clayton, Dubilier & Rice are a few examples. These parent companies create value through management expertise. They improve plans and budgets and provide especially competent central functions such as legal, financial, human resource management, procurement, and the like. They also help subsidiaries make wise choices in their own acquisitions, divestitures, and new internal development decisions.

Diversified Public Corporations Such as Berkshire Hathaway and Virgin Group