Rolleigh Corp.identifies growth by new product development and product improvement as the number one corporate goal.An employee at Wrigley's,one of Rolleigh's wholly-owned subsidiaries,developed an innovation to an existing product that would directly address a shortcoming in the similar product offered by Rolleigh's closest competitor.Wrigley's current Return on Investment (ROI)is 15%,but the product innovation is expected to generate ROI of only 12%.Awarding bonuses to subsidiary managers based on ROI could result in:
A) goal conflict
B) information overload
C) goal congruence
D) decreased value of information

Question

Quizplus · Accepted Answer

Goal conflict may arise if subsidiary managers are solely rewarded based on ROI, as the product innovation may not meet the expected ROI target. This could discourage employees from developing new and innovative products that may not initially meet ROI targets but could ultimately lead to growth and profitability for the company.