... those cars. Thus they use their core competencies, being knowledge of motor cars and customer satisfaction to match with motor industry opportunities and to attain a competitive advantage (better customer value for the same cost). 2. Remuneration was to be calculated as a straight percentage of the departments gross profit Remuneration Review. Focus is too financial and decentralized. o In single industry and related diversified, the more the incentive bonus of general managers emphasises the separate performance of each unit, the greater the possibility of interunit conflict. o This is tied to purely financial based and not aligned with the corporate goal of return business from customers. o Development of the agency problem where the departments heads, as agents, may be acting in their own best interests, not that of the other departments and company as a whole. This is inconsistent with goal congruence. * Need: Monitoring, financial statements, incentive contracting o ...

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