The downside of synergy in a diversified firm is:
A) Increasing independence of businesses
B) The reduction of activity sharing
C) Excessive focus on risky innovation
D) The loss of flexibility

Question

Quizplus · Accepted Answer

The downside of synergy in a diversified firm is the loss of flexibility. When businesses in a diversified firm work together to achieve synergy, they may become too interconnected, which limits their ability to make independent decisions and respond quickly to changes in the market. This lack of flexibility can hinder the firm's ability to adapt to changing market conditions and may result in missed opportunities or poor performance.

The Downside of Synergy in a Diversified Firm Is