1. Discuss the decision taken by the Production Manager. (5 marks)
2. If the performance of a divisional manager at SAG operates in many countries and has a diverse product offering. With such complex and broad operations, there are invariably many factors that can affect the performance of a business sector or division. In its 2019 Annual Report, SAG refers to its future trading strategy, called Vision 2020+, which aims to grant their individual businesses more entrepreneurial freedom and responsibility for their results. A key component of this strategy relates to sustainable company development, and it is reported that, as one element of determining the total remuneration payable to the Managing Board, sustainability is to be measured according to a bespoke SAG Sustainability Index which takes into account the following: three equally weighted key factors: CO2 emissions (environmental), learning hours per employee (social) and Net Promoter Score (governance). Presumably, these (or very similar) measures would also form part of the performance measurement system for divisional management. Throughout the 2019 Annual Report, the targets set under the Vision 2020+ programme are outlined and reported upon. For example, under the financial heading, revenue growth is referred to as follows: Our primary measure for managing and controlling our revenue growth is comparable growth, because it shows the development in our business net of currency translation ... and port-folio effects.

Required

SAG falls short of target due to external factors such as an economic recession, should the manager be held accountable? And why?