Practicing Success

Target Exam

CUET

Subject

Entrepreneurship

Chapter

Enterprise growth Strategies

Question:
Assertion: Boardroom split is one the main reasons for success of mergers and acquisitions.
Reasoning: An acquisition may face legal hurdles which may result in regulatory delays and increases the risk of deterioration for the business.
Options:
Both Assertion (A) and reasoning (R) are correct and R is the correct explanation of A.
Both Assertion (A) and reasoning (R) are correct and but R is not the correct explanation of A.
Assertion (A) is true but Reasoning (R) is not correct.
Assertion (A) is not true but Reasoning (R) is correct.
Correct Answer:
Assertion (A) is not true but Reasoning (R) is correct.
Explanation:
Boardroom split is one of the reasons for failures of merger and acquisition.
Boardroom split :When a merger is planned, it is crucial to evaluate the composition of the boardroom and compatibility of the directors. Managers or directors who are suddenly deprived of authority can be particularly bitter. Specific personality clashes between executives in the two companies are also very common. This may prove to be a major problem, slowing down or preventing integration of the entities.