If upper management uses a short time frame to calculate ROI and RI,division managers have an incentive to take actions that will lead to an immediate increase in these measures.

Question

Quizplus · Accepted Answer

If upper management only focuses on short-term ROI and RI, it can create an incentive for division managers to prioritize actions that will produce quick results rather than long-term value creation. This can lead to decisions that may not be sustainable or beneficial for the company in the long run.

If Upper Management Uses a Short Time Frame to Calculate