Which of the following is TRUE?
A)Maximizing division profits can sometimes lead to reducing company-wide profits
B)Managers of profit centers are not given any discretion in their decision making
C)Profit centers usually require the highest degree of attention of corporate executives
D)A manager being rewarded on division revenues has no incentive to make good decisions for his division

Question

​Which of the following is TRUE?
A)​Maximizing division profits can sometimes lead to reducing company-wide profits
B)Managers of profit centers are not given any discretion in their decision making
C)Profit centers usually require the highest degree of attention of corporate executives
D)​A manager being rewarded on division revenues has no incentive to make good decisions for his division

Quizplus · Accepted Answer

Maximizing profits in a division may require sacrificing resources or investments that benefit the company as a whole, resulting in reduced company-wide profits. This is known as the "agency problem," where individual goals may conflict with the goals of the organization.

​Which of the Following Is TRUE

Which of the Following Is TRUE