ROI improves division but not overall corporation: How?
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Describe the specific actions that division managers might have taken to cause the ROI to increase in each division but decline for the corporation. Illustrate your explanation with appropriate examples.
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Solution Summary
Your tutorial is 276 words and gives examples of what can happen when you reward ROI.
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If you reward ROI, managers have an incentive to "cherry pick" projects with high returns and ignore projects with only average (but attractive) returns. As the successful managers are more likely to discern and effectively complete projects, their ROI gets higher and higher, making them even pickier about what they will agree to accept as a project. So, the very strong managers grow very slowly and take on fewer and fewer ...
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