Question

Managerial motives to seek diversification include a desire to

a. improve their marketability to other firms.
b. effectively use corporate resources.
c. provide higher returns to corporate stakeholders.
d. increase their compensation.

Answer 1

Managerial motives to seek diversification include improving marketability, using corporate resources effectively, and providing higher returns to stakeholders.

Step-by-step explanation:

The managerial motives to seek diversification include a desire to:

1. improve their marketability to other firms: By diversifying their skills and experiences, managers can make themselves more attractive to other firms in the industry.
2. effectively use corporate resources: Diversification allows managers to allocate resources and capabilities across different business units, maximizing their utilization.
3. provide higher returns to corporate stakeholders: Diversification can help to reduce risk and enhance the overall performance of the company, leading to higher returns for stakeholders.