Management Control Systems 4th Edition Management Control Systems 4th Edition

1. What went wrong?
· In this Fit Food Inc, we are operating under three divisions and according to the annual operating plans, each division has to meet the revenue and profit targets in order to be liable to receive the performance bonus at the end of the year. However, during 2008 and 2009 when the global financial crisis happened, it's contagion effect impacted all the industries and the overall economic activity slowed down. Because of this, the growth across all three segments - energy drinks, cookies, and savory decreased. However, based on the company philosophy no targets were lowered for the annual year 2008 and 2009. This gave the division heads and impetus to work around the accounting policies to ensure that the revenue and profit targets were achieved. The controller and CFO got to know about this and now they are contemplating around the decisions that heads made to...