The use of return on investment as a performance measure may lead managers to make decisions that are not in the best interests of the company as a whole.

Question

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Return on investment (ROI) as a performance measure focuses on the profitability of an investment or project, which may not necessarily align with the overall goals and objectives of the company. This can lead managers to prioritize short-term gains over long-term growth and sustainability, potentially harming the company in the long run.

The Use of Return on Investment as a Performance Measure