The manager of the Benson Division has an opportunity to invest the funds offered by Headquarters at an ROI of 14%. The other two d. divisions have investment opportunities that yield only 13%. Even so, the manager of Benson rejects the additional funding. Explain why the manager of Benson would reject the funds under these circumstances. 

The manager of Benson Division would reject the additional funds if its current Division ROI is greater than 14% and wants to keep it that way. The performance of other divisions with the ROI of 13% would not affect this decisions because they are evaluated differently thus they have no bearing on the performance of Benson Division.

If the division accepts the additional funding of headquarters, its ROI will go down and inside the division, that is not a good thing although they have a higher ROI than other divisions and even the headquarters. Instead, the manager would rather look for another investment opportunity that will yield a return higher than it's current ROI.

This type of decision conflict results from the organizational structure of decentralization which involves dividing the company into divisions and evaluating them individually. This is called goal incongruence which is defined as a situation where goals of each individual management of Divisions and the organization as a whole are not aligned with each other.

Accepting the 14% investment opportunity might mean a lower ROI for Benson Division but it will increase the overall ROI of the whole company - since the other divisions are only at 13%. However, the division manager does what he thinks is the best for his division, so the investment opportunity is lost.