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

Question

Quizplus · Accepted Answer

If managers are solely focused on maximising return on investment for their specific division, they may reject projects that would ultimately benefit the overall organisation. This can happen if the project doesn't align with their division's goals or if it doesn't provide a high enough return on investment for their division, even if it would benefit the organisation as a whole. Therefore, it is true that the objective of maximising return on investment may induce managers of highly profitable divisions to reject projects that should be accepted for the overall organisation.

The Objective of Maximising Their Return on Investment May Induce