Lecture 1 – The nature of performance management (Vertical Consistency)

Hi Sir,

For the part of vertical consistency, i do not quite understand the concept.

You mentioned that there are 2 divisions. 1 division is making a profit of 5. Another division is making a profit of 4. There is no point in saying that the organisation has to make a profit of 12 just to consolidate?

So does it mean that they can only make a profit of 9 upon consolidating? Since making a profit of 12 is not possible for them?

Thanks!
Regards,
Joanna