Criticisms of return on investment as the only performance measure include:
A) ROI focuses on short-term decisions.
B) ROI is focused on only one component of the value chain.
C) Managers evaluated based only on ROI are sometimes motivated not to make an investment that is in the best interest of the organization as a whole.
D) All of the above.

Question

Quizplus · Accepted Answer

All of the options listed are valid criticisms of using ROI as the only performance measure. Focusing on short-term decisions can sometimes lead to actions that aren't in the long-term interest of the organization. ROI is also limited to assessing performance based on financial outcomes and may overlook other valuable contributions to the organization. Finally, when managers are evaluated only on their ROI, they may make decisions that prioritize their own performance metrics rather than the overall success of the company.

Criticisms of Return on Investment as the Only Performance Measure