There is research evidence that suggests that conflicts that emanate from transfer pricing have far-reaching adverse consequences for interdivisional cooperation, sharing of information, goal congruence, employee motivation and performance. Conflict remains, however, a relatively less explored aspect of transfer pricing in the accounting literature. It is acknowledged that although conflict cannot be totally eliminated, some conflict may be even desirable. It is essential to gain insight to the complexities inherent in conflict and resolution methods so as to minimise undue strain on individuals affected. The aim of this paper is therefore to identify and examine the nature of transfer pricing conflicts and the manner in which these conflicts are resolved. The data for the present study were gathered from 80 service firms in Australia via a postal questionnaire and 11 face-to-face interviews with managers who are directly involved in transfer pricing. The results of the survey reveal that the vast majority of organizations experience frequent conflicts brought about by transfer pricing, with opportunistic behaviour the most commonly cited reason, and that most conflicts are resolved through negotiation between the disputing parties, followed by a forced solution from top management. These results add further evidence that transfer pricing continues to contribute to significant interdivisional conflict with no resolution yet apparent. This study represents the first empirical attempt to investigate the transfer pricing conflict exclusively in a service setting, and develops an enhanced understanding of factors that give rise to conflicts, and the prevailing practices of conflict resolution methods.
|Number of pages||1|
|Publication status||Published - 2011|
|Event||Annual International Conference on Business: Accounting, Finance, Management & Marketing - Athens, Greece|
Duration: 04 Jul 2011 → 07 Jul 2011
https://www.atiner.gr/abstracts/2011BUS-ABST.pdf (Conference Abstract Book)
|Conference||Annual International Conference on Business: Accounting, Finance, Management & Marketing|
|Period||04/07/11 → 07/07/11|