Megaline, Inc

question 105

Multiple Choice

Megaline, Inc., follows the competitive form of the multidivisional structure. It has five divisions. One division has not met the rate-of-return goals for the past year. One division has exceeded the rate-of-return goals. The other three divisions met the rate-of-return goals. The headquarters office is making decisions about where to allocate capital in the next year. Which scenario is the MOST likely?

• A) The poorest performing division will get the highest capital allocation so that it can fix its problems and achieve the rate-of-return goal next year.
• B) The highest performing division will get the highest capital allocation because it has the best prospects for creating more wealth for the shareholders next year.
• C) The average performing divisions which met the rate-of-return goals will receive the highest allocation because their performance exactly matched corporate requirements.
• D) All divisions will receive the same capital allocation for the next year because this organizational structure rewards divisional managers based on achievement of strategic goals.

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Definitions:

LMC

Least Material Condition, a feature of size symbol that denotes the tolerance condition of a part when it contains the least amount of material within specified limits.

Feature of Size

Refers to any geometric characteristic of a part that includes a dimensional specification, such as diameter, length, or width.

Diameter

A straight line passing through the center of a circle or sphere and terminating at both circumferences, representing the widest distance across it.

Thickness

The dimension from one surface of an object to the opposite surface, measured perpendicular to the surfaces.