Chapter 10, Problem 1ME

Using Terms to Complete Sentences about Decentralized Performance Evaluation

Use the following terms to complete the sentences that follow; terms may be used once, more than once, or not at all:

1. Managers of a(n) _____________ center are evaluated based on measures such as ROI and residual income.
2. Suboptimal decisions and duplication of resources are considered disadvantages of _________________.
3. A positive ________________ results when managers invest in projects that earn more than the hurdle rate.
4. The _________________ Perspective focuses on processes required to meet customer needs through measures such as on-time delivery and quality.
5. The ___________________ states that managers should be held responsible only for what they can control.
6. __________measures the economic wealth that is created when a company’s after-tax operating income exceeds its cost of capital.
7. The ____________________ perspective typically contains leading indicators, which are measures that reflect future performance.
8. A change in the investment turnover ratio from 1.5 to 3.2 will _____________________ the division’s ROI.
9. The maximum transfer price is the ________________.
10. Goal ____________________ results when there is conflict between a manager and the organization as a whole.