Question: 3. U-Tech Pty Ltd. operates in a dynamic business environment characterised by rapid and unpredictable changes in technology advancement, customer preferences, and competitors' actions. The

3. U-Tech Pty Ltd. operates in a dynamic business environment characterised by rapid and unpredictable changes in technology advancement, customer preferences, and competitors' actions. The company pursues a differentiation strategy through designing and manufacturing innovative and high-quality robotic toys. It has three divisions in Melbourne, Perth, and Sydney, which operate as profit centres. Page 2 of 3 22421 Information for Decisions and Control - Practice Exam Hopwood (1972) put forward three performance evaluation styles: budget-constrained, profit- conscious, and non-accounting. Which style should the top management use to evaluate the performance of the divisions? Why? (6 marks) Solution: Explain features of profit conscious style Justification: . High level of uncertainty - many uncontrollable factors. Product innovation is usually associated with uncertainty/higher risk . Higher innovativeness and better quality may require investment more than what was planned Controlling costs is not the top priority

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