A Problem with Ratio-Based Measures Is That Managers Can Make

question 114

True/False

A problem with ratio-based measures is that managers can make decisions that improve divisional income but lower total organizational income.

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Definitions:

Subsystem

A division or component of a system that fulfills specific functions within the larger system's operation.

Contingent Operation

An operation or process that is dependent on certain conditions or events, which are usually uncertain or variable.

Supersystem

is a complex system made up of multiple interconnected and interdependent systems, functioning as a comprehensive whole.

Organisational Purpose

The fundamental reason for an organization's existence, often reflected in its mission or vision statements, driving its goals, strategies, and actions.