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NEGOTIATED TRANSFER PRICING AND CONFLICT RESOLUTION IN ORGANIZATIONS
Author(s) -
Ackelsberg Robert,
Yukl Gary
Publication year - 1979
Publication title -
decision sciences
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.238
H-Index - 108
eISSN - 1540-5915
pISSN - 0011-7315
DOI - 10.1111/j.1540-5915.1979.tb00033.x
Subject(s) - transfer pricing , negotiation , microeconomics , product (mathematics) , transfer (computing) , smoothing , business , industrial organization , new product development , economics , marketing , computer science , multinational corporation , mathematics , geometry , finance , parallel computing , political science , law , computer vision
An experiment was conducted to test hypotheses about conflict related to negotiated transfer pricing. A business game with repeated decision periods was used to simulate transfer pricing negotiations between corporate divisions. When the evaluation of division executives emphasized corporate profits rather than divisional profits, there was more smoothing and integrative problem solving and less aggressive‐competitive behavior, relations between the divisions were better, and more cooperation was observed to occur in other decisions unrelated to the transfer pricing. Moreover, corporate profits from the transfer product and its derivative product tended to be larger. All of these effects were most pronounced when the transfer product was important to both divisions as a source of profits.