The Chief Executive Officer (CEO) has changed the direction of a business and no longer needs one of the divisions. A deal is reached to sell the division to a company in another state. Which of the…

The correct answer is D. Demerger. A demerger (also called a divestiture or spin-off) occurs when a company separates or sells off a distinct division, business unit, or subsidiary to another entity. This is precisely what is described - a division is being separated from the parent company and sold externally…

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Question

The Chief Executive Officer (CEO) has changed the direction of a business and no longer needs one of the divisions. A deal is reached to sell the division to a company in another state. Which of the following BEST describes this type of organizational change?

Options

ABusiness process change
BInternal reorganization
CRelocation
DDemerger

How the community answered

(43 responses)

A
2% (1)
B
2% (1)
C
9% (4)
D
86% (37)

Explanation

A demerger (also called a divestiture or spin-off) occurs when a company separates or sells off a distinct division, business unit, or subsidiary to another entity. This is precisely what is described - a division is being separated from the parent company and sold externally. Business process change (A) refers to altering how work is done within an existing structure, not splitting the company. Internal reorganization (B) involves restructuring departments or reporting lines within the same company. Relocation (C) means moving people or operations to a different physical location, which is not the primary nature of this change, even though another state is mentioned.

Topics

#demerger#organizational change#business change types

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