When executives embark on diversification because they desire to build a larger company, they are said to be engaging in ________.
A) risk reduction
B) empire building
C) dominant logic
D) scope building

Question

Quizplus · Accepted Answer

Empire building refers to the motivation of executives to expand their companies simply for the sake of growth and size, often driven by personal ambition or desire for power and influence. This motivation may lead to diversification as a means of expanding the company's scope and scale. Risk reduction (A) is not a primary motivation for diversification for the purpose of empire building. Dominant logic (C) refers to the prevailing assumptions and beliefs within an industry or company, and is not directly related to diversification. Scope building (D) is a related concept to empire building, but is not a commonly used term in this context.

When Executives Embark on Diversification Because They Desire to Build