Question

The ultimate test of the value of a corporate-level strategy is whether the:______.

a) corporation earns a great deal of money.
b) businesses in the portfolio increase the firm's financial returns.
c) top management team is satisfied with the corporation's performance.
d) businesses in the portfolio are worth more under the management of the company in question than they would be under any other ownership.

Answer 1

D) businesses in the portfolio are worth more under the management of the company in question than they would be under any other ownership.

Step-by-step explanation:

The primary goal of a corporation's board of directors and upper management is to maximize the wealth of the corporation's shareholders. And if you really want to determine how good or bad they are performing, you should compare to how other hypothetical managers or directors would act and perform. E.g. it is very difficult for a company like Google, Disney or Apple to lose money, even if their top managers aren't that brilliant, but what shareholders will seek is that their performance excel the performance of other potential managers. That is why it is really difficult to replace great CEOs like Bob Iger or Steve Jobs.

Answer 2

Option D. businesses in the portfolio are worth more under the management of the company in question than they would be under any other ownership.

Step-by-step explanation:

The reason is that the corporate strategy manages the subsidiaries and the parent company as well to drive maximum value from the whole business efficiently by effective strategies. The subsidiaries that were generating profits after acquisition of $5000m and before acquisition of $4500m means that the corporate strategy was effectively implemented which helped the whole parent and subsidiary to drive maximum benefits out of its owned assets.