Indicate Whether Each of the Following Statements Is True or False

question 125

Short Answer

Indicate whether each of the following statements is true or false.
Return on investment often is used to evaluate cost centers within a company.______
Return on investment measures a manager's ability to maximize earnings above a target level.______
To calculate residual income,a company must first set a target or desired return on investment.______
Residual income is stated as a dollar amount.______
Suboptimization occurs when a departmental or division manager seeks to maximize benefit for the company as a whole at the expense of his or her own best interest.______

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Definitions:

Departmentalization

The method an organization uses to divide its operations and functions into manageable sections based on task, geographic location, product, or service.

External Environments

All elements outside of an organization that can affect its performance and strategy, including economic, technological, socio-cultural, and legal factors.

Mechanistic Structures

Organizational frameworks characterized by rigorous procedures, clear hierarchies, and distinct roles, aiming for efficiency and predictability.

Organic Structures

Flexible and adaptive organizational structures that foster innovation, creativity, and responsiveness, emphasizing informal networks and decentralized decision-making.