Read the extract below and answer the following questions M/s. XYZ Ltd., is business organized as three divisions and Head Office. The divisions are based on market groupings, which are Retail, Wholesale and Government. The divisions do not trade with each other. The main method of control of the divisions has been the requirement to earn a return on investment (ROI) of 15% per annum. The definition of return and capital employed is provided by Head Office, as is the criterion rate of 15%. The recent experience of M/s. XYZ Ltd., is that the group, as a whole, has been able to earn 15% ROI but there have been wide variations between the results obtained by different divisions. This infringes upon another group policy that forbids cross-subsidization i.e., each and every division must earn the criterion ROI. M/s. XYZ Ltd., is now considering divestment strategies and this could include the closure of one or more of-its divisions.

(a) Discuss why you think there were various in the performance by different divisions. (10Marks)

(b) Apply the Resource Based view theory to an organization (10 Marks)