This work investigates the limitations and potential distortions inherent in using Return on Investment (ROI) as the primary metric for corporate control and decision-making. The author, Dearden, examines the traditional accounting frameworks used to evaluate divisional performance and argues that an over-reliance on ROI can lead to suboptimal resource allocation and misaligned managerial incentives. By dissecting the mathematical and behavioral consequences of these metrics, the text provides a critical assessment of how financial control systems influence organizational behavior.

This text serves as a specialized critique of mid-20th-century management accounting practices, offering a technical perspective on the pitfalls of rigid financial metrics. The analysis remains a relevant study for those interested in the historical evolution of corporate governance and the limitations of quantitative performance evaluation.