Which of the following is a disadvantage of a focus on return on investment?
A)It can encourage managers to focus on cost-cutting efforts.
B)It can produce a narrow focus on divisional profitability at the expense of profitability for the overall firm.
C)It can encourage managers to cut inventories and reduce overall investment.
D)It can encourage managers to focus on the long run at the expense of the short run.

Question

Quizplus · Accepted Answer

Focusing solely on ROI can lead managers to prioritize short-term gains for their specific division, even if it comes at the expense of the overall profitability of the firm. This can create a siloed approach that ultimately harms the company's long-term success by ignoring the impact of interdependent factors across departments and product lines.

Which of the Following Is a Disadvantage of a Focus