When a firm pursues related diversification, its ability to achieve tangible economic benefits depends on increased coordination and communication among its different business lines [17,18]. The interrelationships among individual divisions require centralized decision making in order to facilitate coordination among them. Because centralized decision making makes it difficult to determine the efficiency of individual divisions, the firm increases the amount of information it processes in order to overcome this equivocality problem. Thus, when a firm pursues related diversification, it should consider the costs of coordinating resources, including the costs of information sharing, across related markets. When a firm pursues unrelated diversification, however, it must establish operating autonomy and a monitoring apparatus, i.e., a system within which divisions can be held accountable for their performance. This allows the firm to achieve maximum benefits from internal capital markets as well as facilitating least-cost behavior and the efficient allocation of capital
resources within the firm. In the case of unrelated diversification, there are no interrelationships among divisions, i.e., no sharing of business resources, such as managerial expertise and technical knowledge. Thus, unrelated diversification does not require as much coordination as related diversification.