Return on Investment Cannot Be Used Effectively to Evaluate Profit

question 89

True/False

Return on investment cannot be used effectively to evaluate profit centers because it motivates managers to make suboptimal decisions from the viewpoint of the organizations' owners.

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Definitions:

Social Psychologist

A professional who studies how individual thoughts, feelings, and behaviors are influenced by the social environment and the presence of other people.

Destructive Obedience

The concept where individuals comply with harmful orders or directives, often from an authority figure, against their own personal morals or ethical codes.

Milgram Experiments

A series of social psychology experiments conducted by Stanley Milgram, which measured the willingness of study participants to obey an authority figure who instructed them to perform acts conflicting with their personal conscience.

"Learners"

Individuals engaged in the process of gaining knowledge, understanding, or skill through study, experience, or teaching.