Managers in a department store have decided that the shoe department is not a profitable part of the store and it would be better suited to being an independent organization that rented space from the store. What type of strategy is demonstrated if the shoe department is separated from the department store into a separate entity?
A) merger
B) divestiture
C) bankruptcy
D) growth

Question

Quizplus · Accepted Answer

Divestiture refers to a strategy where a company sells or spins off a part of its business that is no longer deemed to be profitable or core to its operations. In this case, separating the shoe department into a separate entity would be an example of divestiture.

Managers in a Department Store Have Decided That the Shoe