Question

The corporate office of Novartis, formerly Ciba-Geigy, acts to improve many key activities, including resource allocation and reward and evaluation systems. This is an example of creating value by using

Answer 1

Options:

A. related diversification to achieve value by leveraging pooled negotiating power to attain economies of scope.

B. related diversification to acquire market power by leveraging pooled negotiating power.

C. unrelated diversification to acquire financial synergies through portfolio management.

D. related diversification to acquire parenting, restructuring, and financial synergies through corporate restructuring and parenting.

Answer:

C. unrelated diversification to acquire financial synergies through portfolio management.

Explanation:

Such a strategy employed by Novartis is meant to create value for the organization in particular and other stakeholders through unrelated diversification from company objectives.

By so doing Novartis creates and acquires financial synergies through it's portfolio management.