A large company operated in several businesses, including computers, disk drives, financial services, and defense satellites. Each business operated as a self-contained division. However, due to an economic downturn and changing market conditions, the company sold its noncore businesses of financial services and defense satellites in order to focus only on computer-related products. However, after making these sales, its costs were still high. a. What was the root cause of the problem? b. What structural changes needs to be made to resolve it?
A large company operated in several businesses, including computers, disk drives, financial services, and defense satellites. Each business operated as a self-contained division. However, due to an economic downturn and changing market conditions, the company sold its noncore businesses of financial services and defense satellites in order to focus only on computer-related products. However, after making these sales, its costs were still high. a. What was the root cause of the problem? b. What structural changes needs to be made to resolve it?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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A large company operated in several businesses, including computers, disk drives,
financial services, and defense satellites. Each business operated as a self-contained division.
However, due to an economic downturn and changing market conditions, the company sold its
noncore businesses of financial services and defense satellites in order to focus only on
computer-related products. However, after making these sales, its costs were still high.
a. What was the root cause of the problem?
b. What structural changes needs to be made to resolve it? Justify
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