Divisional performance
4 important questions on Divisional performance
When is a group structure applicable?
- Strong difference in activities and markets
- independence of activities
- extra profit own division does not lowe profitability of the whole company
When a measure becomes a target it ceases to be a good measure
The more a metric counts for real decisions, the greater the pressure for corruption, the more it distorts the situation it's intended to monitor
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Division profit as a percentage of invested capital
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