Strategic Performance Measurement
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Hello, Could someone hellp me with the questions for this case study (See attached). Thanks for the help. Here are the questions:
1. Should Johnson's six divisions be treated as profit SBUs or some other type of strategic performance measurement system? Explain.
2. Comment on the firm's decision not to trace currency gains and losses and foreign tax expense to the international division.
3. Comment on the firm's consideration of changing the IT department from a cost SBU to a profit SBU. What are the likely effects on the firm and on the IT department?
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1. Johnson's six divisions should be kept as profit SBUs. By doing this, the parent company will be able to track profits and losses to the individual divisions. Also, assuming the company is public, it will give analysts and investors better information on how the individual SBUs are performing. Sometime in the future, the company may decide to sell off or merge divisions and by keeping them separate now, they will be able to make an intelligent, informed decision in the future.
<br><br><br><br><br><br>2. Currency gains and losses and foreign tax expenses should be traced to the international division. This should be done for three reasons.
<br><br><br><br><br><br>First, by not tracing gains and losses to the international divison it gives a ...
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