True or false: Firms that pursue either related or unrelated diversification generally employ a multidivisional structure.True false question.TrueFalse

Answer

True.

Firms that pursue either related or unrelated diversification typically adopt a multidivisional structure, also known as a M-form structure. This organizational setup allows companies to manage multiple divisions separately, each focusing on different product lines or markets.

In related diversification, divisions may share synergies and resources, while in unrelated diversification, the divisions operate independently in distinct markets. The multidivisional structure facilitates strategic control and performance accountability, enabling firms to effectively allocate resources, manage risks, and respond to market opportunities across diverse business lines. Thus, the statement is true.