CHAPTER 6.4.docx - Strategic competitiveness is improved...

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Strategic competitiveness is improved when the level of diversification is appropriate for the level of available resources. o Value reducing diversification: managerial motives to diversify o Managerial motives to diversify: Managerial risk reduction Desire for increased compensation Build personal performance reputation o Effects of inadequate internal firm governance Diversification fails to earn even average returns Threat of hostile takeover Self-interest actions of entrenched management
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CHAPTER 7 o Popularity of merger and acquisition strategies: o Firms use merger and acquisition strategies to improve their ability to create more value for all stakeholders, including shareholders. o In approximately two-thirds of all acquisitions, the acquiring firm’s stock price
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