Zumwald AG In August $2002,$ a pricing dispute arose, between the managers of some of the divisions of Zumwald AG$.$ Mr$.$ Rolf Fettinger, the company$$s managing director, had to decide whether to intervene in the dispute. THE COMPANY Zumwald AG$,$ headquartered in Cologne, Germany, produced and sold a range of medical diagnostic imaging systems and biomedical test equipment and instrumentation. The company was organized into six operating.$-$divisions. Total annual revenues were slightly more than $3$ billion. Zumwald managers ran the company on a highly decentralized basis. The managers of each division were allowed considerable autonomy if their performances were at least on plan. Performance was evaluated, and management bonuses were assigned, based on each division's achievement of budgeted targets for return on invested capital $($ROIC$)$ and sales growth. Even though the company was partly vertically integrated, division managers were allowed to source their components from external suppliers if they so chose.