The evaluation of a subunit should be separated from the evaluation of the subunit's manager because
A)a subunit always shows better performance.
B)an excellent manager may be doing the best job possible in a poor subunit.
C)poor performance by managers may cause subunits to perform poorly.
D)GAAP requires separate evaluations of managers and the respective subunits.

Question

Quizplus · Accepted Answer

A subunit's performance is not solely dependent on the manager's actions. External factors such as market conditions, competition, and technology can also affect subunit performance. Therefore, evaluating the subunit separately from the manager allows for a more accurate assessment of subunit performance and the factors that affect it. Additionally, an excellent manager may not be able to overcome these external factors and may still have a poor-performing subunit.

The Evaluation of a Subunit Should Be Separated from the Evaluation