How do diversified companies typically assess the performance of their business units?

Diversified companies commonly use profit and loss data to assess the performance of their business units because this financial information provides a clear and quantifiable measure of each unit's profitability and overall financial health. Analyzing profit and loss statements allows management to determine how well each unit is performing relative to its revenue generation and cost control. This financial performance analysis helps in making strategic decisions regarding resource allocation, investment, or divestment in specific business units.

While employee surveys, market research, and customer feedback can provide valuable insights into various aspects of a company’s operations, they don't give a direct financial assessment as profit and loss data does. Employee surveys might reveal worker satisfaction and engagement levels, market research can indicate potential opportunities or threats in the market, and customer feedback can highlight areas for improvement in products or services. However, when it comes to gauging the economic success and sustainability of business units, profit and loss data is the most essential and comprehensive tool used by diversified companies.