To Encourage Division Managers to Act in Ways Consistent with Organizational

question 113

Multiple Choice

To encourage division managers to act in ways consistent with organizational goals,divisional planning and control systems attempt to create

• A)profit maximization.
• B)centralization.
• C)goal congruence.
• D)non-goal-congruent behavior.

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Definitions:

Significant Influence

A level of control or impact an investor has over an investee, typically indicated by ownership of 20% to 50% of voting shares, allowing influence over business decisions without full control.

Intercompany Transactions

Financial transactions occurring between two divisions or subsidiaries within the same parent company.

Strategic Investment

An investment made by a company to build a lasting interest in a related company to help further business objectives.

Significant Influence Investments

Investments in which the investor has the power to participate in the financial and operating policy decisions of the investee but does not control or jointly control them.