120) 'Boundary systems' describe standards of behaviour and codes of conduct expected of all

employees, especially actions that are off-limits.

120)

 

121) A major weakness of comparing two companies using only operating profits as the basis of

comparison is that this method ignores differences in the size of the investment required to earn the

operating profit.

121)

 

122) An interactive control system is a formal information system that managers use to focus

organisation attention and learning on key strategic issues.

122)

 

123) Imputed costs are costs recognised in particular situations that are not usually incorporated in

financial accounting records.

123)

 

57

124) One way to achieve greater comparability of historical cost-based ROIs for a company's foreign

division is to restate performance in home country currency.

124)

 

125) The three alternatives for increasing return on investment include increasing assets such as

receivables, increasing revenues, and decreasing costs. (In all cases assume that all other items stay

the same.)

125)

 

126) To evaluate overall aggregate performance, return on investment and residual income measures

are more appropriate than return on sales.

126)

 

127) The ROI, RI, and EVA® calculations represent the results for a several periods, for example three

years.

127)

 

128) Investment turnover is calculated by dividing investments by revenues. 128)

 

129) The only criticism of team-based compensation is that the incentives for individual employees to

excel are diminished, harming overall performance.

129)

 

not productive contributors to the team's success but who, nevertheless, share in the

team's rewards.

 

 

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