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- 8 Marks
Question
State FOUR reasons that may influence a company or government to undertake a divestiture programme.
(8 marks)
Answer
- Raise funds: Divestiture programmes are undertaken to raise funds for the company or the government.
- Focus on core activities: They enable the company to concentrate on its core activities.
- Bankruptcy process: Divestiture may be part of a company’s bankruptcy process.
- Lack of synergy: Companies undertake divestiture if there is no synergy between the divested assets and the company’s core activities.
(Any 4 x 2 marks = 8 marks)
- Tags: Bankruptcy, Business Strategy, Divestiture, Fundraising, Organizational Structure
- Level: Level 1
- Topic: Business and Organisational Structure
- Series: NOV 2016
- Uploader: Dotse