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Furniture for Life (FFL) Pty Ltd is a wholesale business that imports sofas to sell to retailers in the domestic Australian market. Budgets at
Furniture for Life (FFL) Pty Ltd is a wholesale business that imports sofas to sell to retailers in the domestic Australian market. Budgets at FFL are used for coordination between the different parts of the organisation and also for the evaluation of employee performance. Jerry is the manager of the sales division and provides the budgeted sales number every year. The budgeted sales number is determined mainly based on internal factors such as past (actual) sales. A sizable amount of Jerry's bonus is tied to being able to exceed the sales budgets, which he has managed to achieve every single year since commencing in his role in 2015. What of the following statements is/are likely to be true? 1) If budgets are used to evaluate performance, this creates an incentive for employees to negotiate budgets that are easy to achieve. 2) It is clear that FFL's sales division is outperforming its competitors. 3) Jerry may be providing sales targets that are easy to achieve. Statement 1 only Statement 2 only Statement 3 only Statement 1 and 2 only Statement 1 and 3 only
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