Which strategy is characterized by retraining the remaining employees and emphasizes reducing the asset base?

Which strategy is characterized by retraining the remaining employees and emphasizes reducing the asset base?

• A. Concentration
• B. External growth
• C. Disinvestment
• D. Internal growth

Answer: (C)

This question tests how a firm streamlines its portfolio by shedding assets and retraining staff. Disinvestment involves selling off or winding down non-core or underperforming assets to reduce the asset base and refocus on what remains valuable. As assets are downsized, the workforce often needs retraining to fit the leaner, reorganized operations, ensuring the company can continue effectively with a smaller footprint. This combination—lowering the asset base and retooling personnel for the remaining activities—best describes disinvestment. By contrast, concentration would mean investing more in the core area, external growth adds assets through acquisitions or alliances, and internal growth emphasizes expanding existing operations without shrinking the asset base.

This question tests how a firm streamlines its portfolio by shedding assets and retraining staff. Disinvestment involves selling off or winding down non-core or underperforming assets to reduce the asset base and refocus on what remains valuable. As assets are downsized, the workforce often needs retraining to fit the leaner, reorganized operations, ensuring the company can continue effectively with a smaller footprint. This combination—lowering the asset base and retooling personnel for the remaining activities—best describes disinvestment. By contrast, concentration would mean investing more in the core area, external growth adds assets through acquisitions or alliances, and internal growth emphasizes expanding existing operations without shrinking the asset base.