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All of the following can cause conflict between divisions EXCEPT • a. Divisional managers are rewarded...

All of the following can cause conflict between divisions EXCEPT • a. Divisional managers are rewarded on the profitability of the firm, instead of profitability of the division • b. managers of profit centers care too little about the effects of their decisions on other divisions • c. managers are rewarded only for how much profit their division generates • d. corporate executives cannot tell when one divisional manager's decisions are appropriate or not

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Answer #1
  • Option c is the answer.
  • The managers are rewarded only for how much profit their division generates.  
  • This will help the manager to get motivated and uplift his division. Rewards are always essential to improve the workings. When it is offered for his hard work, there will not be any conflicts. When the manager is working hard by making more profits from his division and the firm's overall profit is not improved; in such conditions, the rewards based on firm's profitability can create conflicts.
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