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What is Diversification?
Diversification is the entry of the firm into new markets and into new products Diversification when a firm is active in number of industries Diversification represents the extent to which firms operate in different businesses simultaneously Diversification is defined as the entry of a firm or business unit into new lines of activity, either by processes of internal development or acquisition which entails changes in its administrative structure, systems and management processes
Agency Theory
More power and prestige Better compensation Better compensation Reduce unemployment risk Reduce unemployment risk Makes the manger indispensable for the firm Makes the No manger indispensable increase in the value of the firm for the firm
Agency Theory
SR of 1949 SR of 1969