Question

Island Home Goods pursues a related diversification strategy, deriving less that 70 percent of revenues from its original business unit, Island Furniture, and maintaining several related units including Island Lighting and Island Hardware. Which of the following structures is most likely to support this strategy?

A. M-Form with centralized decision-making power (cooperative multidivisional)
B. M-Form with centralized decentralized decision-making power (competitive multidivisional)
C. functional with centralized decision-making power
D. functional with decentralized decision-making power

Answer 1

A. M-Form with centralized decision-making power (cooperative multidivisional)

Step-by-step explanation:

For the firms which perform related or unrelated diversification, they always use the M-form organization structure and the power the take decisions is always centralized. This allows high level of integration of authority.