S-Space College of Business Administration/Business School (경영대학/대학원) Institute of Management Research (경영연구소) 경영논집 경영논집 vol.08 (1974)
An intra-company pricing system in decentralized organizations
- Nam, Sang Oh
- Issue Date
- 서울대학교 경영연구소
- 경영논집, Vol.8 No.1, pp. 54-103
- Intra-company pricing is regarded as an essential part of a decentralized profit control system in any company where divisions buy from and sell to each other. Along with the spread of the use of decentralization or divisionalization as a means of controlling corporation, the theory and application of pricing for intra-company transfers have been a popular topic in recent accounting literature.
Several questions are to be raised and answered in relation to the subject of intra-company pricing. First, how can one measure the performance of divisions. Second, what are the bases for transferring the products between divisions 7 Third, what are the theoretical arguments for these methods 7' Are there any limitations to each method 7 Fourth, if there are many suggested methods for intra-company pricing, what would be the best method for us to use?