The objective of maximizing return on investment may induce managers of highly profitable divisions to reject projects that from the viewpoint of the overall organization should be accepted.

Question

Quizplus · Accepted Answer

The objective of maximizing return on investment may lead managers of highly profitable divisions to prioritize their own division's ROI over the overall organization's ROI, resulting in the rejection of projects that should be accepted for the benefit of the organization as a whole.

The Objective of Maximizing Return on Investment May Induce Managers