Answer to Question 1
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Answer to Question 2
The gap can come about in a number of ways:
(1) Business performance is worse than expected business performance. For example, sales, profits, and margins could be below targets set by management. Or employee turnover is higher than expected.
(2) Actual business performance is less than possible business performance. Realization of this gap first requires that management has some idea of what is possible.
(3) Expected business performance is greater than possible business performance. This could be due to management having an unrealistic view of possible performance levels.