Final answer:
Shareholders, who are more removed from the day-to-day running of a business, often seek higher returns and hence may prefer riskier strategies with greater diversification for the firm, as opposed to managers who may focus on safer, more controlled approaches. The correct answer is option d.
Step-by-step explanation:
Shareholders typically have differing objectives compared to managers when it comes to corporate strategies and diversification. Managers, who are directly involved in the daily operations of a company, may prefer safer strategies with a more focused approach as this allows them to manage risks closely and align with their specific expertise. Shareholders, on the other hand, are often looking for higher returns on their investment, which can be associated with higher risk strategies. Shareholders are more detached from the everyday running of the business and therefore may prefer riskier strategies, assuming these have the potential for higher returns.
Diversification is a standard financial strategy which spreads investments across a wide range of companies, helping to minimize the risk of loss. While diversification by a firm can provide stability, shareholders who have diversified their own portfolios might lean towards wanting the firm itself to pursue riskier, potentially more profitable strategies in order to maximize their returns. Therefore, based on these perspectives, compared to managers, shareholders may prefer riskier strategies with greater diversification for the firm.
The correct answer to this question is: d. riskier strategies with greater diversification for the firm.