The top management of General Electronics Inc. is well known for managing by the numbers. With an eye on the company's desired growth in overall net profit, the company's CEO sets target profits at the beginning of the year for each of the company's divisions. The CEO has stated her policy as follows: I won't interfere with operations in the divisions. I am available for advice, but the division vice-presidents are free to do anything they want as long as they hit the target profits for the year.

What do you think of the plan of the CEO in terms of corporate control?

What are the pros and cons of this plan?