Abstract:
Inside decentralized organizations, the managerial control system
belonging to different under units often uses transfer prices in order to
coordinate the under units actions and for evaluation of their performance.
The transfer prices are the prices cashed by a unit for the products sold to
another unit. The criteria used in price evaluation are: congruency of
targets, managerial effort, under unit performance evaluation and under
department autonomy As concerns the transfer prices, the superior managers
must evaluate the following aspects: the unit can be supplied from exterior
sources so long as the same goods are available inside the unit, and also the
price is the same as for the transfer achievement. The decisions the managers
must take concern the calculation methods of transfer prices and also
concerning the litigation solving modalities. The transfer prices can be based
either on the market or on the costs, or they can be negotiated.
