Final answer:
In a multi-business firm, corporate-level executives are responsible for deciding on the businesses the firm engages in, influenced by the corporate strategy and potentially the board of directors, with the overall aim to align with shareholder interests.
Step-by-step explanation:
In a multi-business firm, corporate-level executives determine the businesses in which the firm should be involved. These executives play a critical role in setting the overall strategy and direction of the company, sometimes with the input of the board of directors. The board is meant to represent the interests of the shareholders, but the executives influence important decisions, including those around business selection and corporate strategy.
As a multi-business firm grows and its operations become complex, the role of executives broadens and other outside investors, like bondholders and shareholders, become more willing to provide financial capital based on widely available information about the company's performance, rather than personal knowledge of the managers. This shows a shift in the need for trust and personal relationships towards a more impersonal and information-driven investment environment as the firm establishes itself.