The Nataraji Corporation adopted the ROI performance measure and related compensation procedures about 10 years ago. The company did so to increase the awareness of divisional management of the importance of the profit asset relationship and to provide additional incentive to the division executives to seek investment opportunities. The company seems to have benefited from the program. The ROI for the corporation as a whole increased during the first years of the program. Although the ROI has continued to grow in each division, the corporate RO1 has declined in recent years. The corporation has accumulated a sizeahle amount of cash and short - term marketahle secuirities in the past 3 years. The corporate management is concerned about the increase in the short-term marketable securities. A recent article in a financial publications suggested that the use of ROI was over emphasized by some companies, with results similar to those experienced by Nataraji. Requirements: 1. Describe the specific actions divisions managers might have taken to cause the ROI to grow in each division but decline for the company. Illustrate your explanation with appropriate examples. 2. Explain using the concepts of goal congruence and motivation of division executives, how Nataraji's over emphasis on the use of the ROI measure might result in the recent decline in the company's return on investment and the increase in cash and short-term marketable securities. 3. What changes could be made in Nataraji Company's Corporation policy to avoid this problem? Explain your answer The Nataraji Corporation adopted the ROI performance measure and related compensation procedures about 10 years ago. The company did so to increase the awareness of divisional management of the importance of the profit asset relationship and to provide additional incentive to the division executives to seek investment opportunities. The company seems to have benefited from the program. The ROI for the corporation as a whole increased during the first years of the program. Although the ROI has continued to grow in each division, the corporate RO1 has declined in recent years. The corporation has accumulated a sizeahle amount of cash and short - term marketahle secuirities in the past 3 years. The corporate management is concerned about the increase in the short-term marketable securities. A recent article in a financial publications suggested that the use of ROI was over emphasized by some companies, with results similar to those experienced by Nataraji. Requirements: 1. Describe the specific actions divisions managers might have taken to cause the ROI to grow in each division but decline for the company. Illustrate your explanation with appropriate examples. 2. Explain using the concepts of goal congruence and motivation of division executives, how Nataraji's over emphasis on the use of the ROI measure might result in the recent decline in the company's return on investment and the increase in cash and short-term marketable securities. 3. What changes could be made in Nataraji Company's Corporation policy to avoid this problem? Explain your