Asked by Hamid Kenani on Sep 24, 2024
Verified
Which of the following is FALSE?
A) Maximizing division profits always leads to maximizing company-wide profits
B) Managers of profit centers are usually given a lot of discretion in their decision making
C) Profit centers usually largely run themselves
D) A manager being rewarded on division revenues has the most incentive to make good decisions for his division
Division Profits
The earnings generated by a specific division or segment of a larger company, reflecting its financial performance.
Profit Centers
Divisions or branches of a business that are treated as separate units for the purpose of calculating profitability, allowing for more focused financial analysis.
Decision Making
The cognitive process leading to the selection of a course of action among several alternatives.
- Discern between the intentions of maximizing profits in divisions as opposed to maximizing profits on a company-wide scale.
Verified Answer
BL
Bianca Lirio5 days ago
Final Answer :
A
Explanation :
Maximizing division profits may not always lead to maximizing company-wide profits as it could potentially harm other divisions or the organization as a whole. Sometimes, decisions need to be made that benefit the company overall, even if it means sacrificing short-term profits for a single division.
Learning Objectives
- Discern between the intentions of maximizing profits in divisions as opposed to maximizing profits on a company-wide scale.