BA 221 Executive Summary: The case highlights the management control concern regarding the conflict between short term tactical goals and long term strategic goals of the company. It was observed that when the company, Industrial Products Corporation employed rate of return on investment (ROI) as a measure of performance for the Baker Division of IPC, the division manager, Mr. Brandt, became more focused on short term goals of the company rather than on meeting the company’s long term goals. Mr Brandt, as the division manager, exercised varied levels of controls for the asset categories under his watch. While his control over the current assets favored meeting high ROI rates, a lack of expansion plans involving fixed assets could be noted. Because increasing investments in fixed assets results in a low ROI rate, long run concerns are not being promoted by having ROI as a performance measure. This conflict could prove to be detrimental to meeting the strategic objectives of a company. One suggested solution is to delay recognition of long term strategic investment in recognition of the fact that the effects of such investment manifests over the long run and not the short run. Because both tactical and strategic decisions are important for a company’s growth and survival, performance measures should strike a balance between both concerns to adequately measure a division’s performance. Case Context: The case focuses on Industrial Products Corporation’s Baker Division which manufactured and assembled large industrial pumps. The Baker Division operated three plants with the division being managed by Mr. Brandt. The division’s product line was divided into five product groups so that the profitability of each could be studied separately. The case ...