The effect of performance evaluation schemes on predicted transfer prices: Do leadership tone and perceived fairness concerns matter?

Chong, Vincent K.; Loy, Chanel Y.; Masschelein, Stijn; Woodliff, David

doi:10.1016/j.mar.2018.02.003

Cited by 11 publications

(5 citation statements)

References 68 publications

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“…Therefore, financial institutions should reward companies that use this system with lower loan interest rates. Perceived fairness proved to have a significant positive effect on usage intention [62,63], which indicates that the government should play the role of a supervisor. On the one hand, the government can easily find unfair loan decisions made by financial institutions through the system.…”

Section: Discussionmentioning

confidence: 94%

Using extended complexity theory to test SMEs’ adoption of Blockchain-based loan system

et al. 2021

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Blockchain-based loan system can be summed up as: information exchange between various government departments; information exchange between enterprises and various financial institutions; detection of the actual use of loans in the form of encrypted currency. This technology is supposed to reduce a lot of financing costs for SMEs on average. Therefore, this research extends complexity theory to discover the factors that affect the use of Blockchain loan systems by SMEs. Complexity, perceived risk, perceived fairness and reward sensitivity prove to have significant effects on usage intention. Complexity proves to have moderating effects on other relationships. This research may contribute to the system performance improvement and provide opportunities for SMEs to share information with financial institutions or individuals around the world, thereby providing investors with equal opportunities for competition.

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Section: Discussionmentioning

confidence: 94%

Using extended complexity theory to test SMEs’ adoption of Blockchain-based loan system

et al. 2021

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“…The study of Chang and Ryu (2013) focuses on determining the key factors that affect a firm's optimal transfer pricing policy (the vertical structure, production technology, the demand characteristics and the competition mode). Chong et al (2018) examine two control mechanisms -leadership tone (informal control) and performance evaluation schemes (formal control) that companies can use to manage transfer pricing negotiations. Chwolka, Martini and Simons (2010) analyse the potential of one-step transfer prices based on either variable or full costs for coordinating decentralised production and quality-improving investment decisions.…”

Section: Economic Outlook At Transfer Pricingmentioning

confidence: 99%

Transfer Pricing in V4 Countries

Poreisz¹,

Brychta²,

Ištok³

et al. 2020

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International Visegrad Fund, whose mission is to advance ideas for sustainable regional cooperation in Central Europe. In this respect, all the members of the research team would like to express their gratitude and thanks to the support provided and, at the same, declare their hope that the results of this project fulfil the mission of the Visegrad Fund. The authors of the monograph would like to thank the project manager, Mr. Dániel Péter. Dear Dániel, we thank you for your fast responses and willingness to help us. We have appreciated it very much.

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“…Conflicts in negotiated transfer price could cause divisions to deal with external suppliers, while top management would prefer divisions to deal internally to put price pressures [3]. Furthermore, independent divisions of vertically integrated companies commonly use negotiated transfer prices to mitigate information asymmetry [4]. Conflicts between negotiators are caused by self-interest and unequal bargaining power [5].…”

Section: Introductionmentioning

confidence: 99%

“…Senior management can create a climate of the work environment to shape employee behavior. Leadership style can raise others' concerns and motivate division managers to deal with an equalprofit price [4]. In addition, compensation schemes based on division profits significantly impact negotiated transfer price judgment [1].…”

Section: Introductionmentioning

confidence: 99%

The Impact of Leadership Style on Seller’s Transfer Price: The Moderating Role of Compensation Scheme

Mareta¹,

Mirza²

2022

Proceedings of the International Conference on Economics, Management and Accounting (ICEMAC 2021)

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Transfer pricing can lead to conflicts between divisions. This is because the seller tends to charge a higher transfer price than the buyer. Therefore, this study examines whether the type of leadership and compensation scheme can influence the seller's transfer price decision to approach an equal profit. This study uses a 2x2 factorial design experimental method on the leadership type variable (supportive vs. non-supportive) and compensation scheme variable (high bonus percentage vs. low bonus percentage). This study indicates that sellers will set transfer prices close to equal profits when under supportive leadership. This is because the type of supportive leadership supports a collaborative work climate and focuses on achieving common goals. In addition, the seller will charge a transfer price close to the equal profit when the compensation scheme has a low bonus percentage. The low bonus percentage is not strong enough to bring out the egocentrism of the seller. The influence of a compensation scheme with a standard bonus percentage will be more substantial if a supportive leadership type supports it. This study provides knowledge to companies to formulate effective strategies to reduce transfer price negotiation conflicts by considering the kind of leadership and compensation schemes.

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The effect of performance evaluation schemes on predicted transfer prices: Do leadership tone and perceived fairness concerns matter?

Cited by 11 publications

References 68 publications

Using extended complexity theory to test SMEs’ adoption of Blockchain-based loan system

Using extended complexity theory to test SMEs’ adoption of Blockchain-based loan system

Transfer Pricing in V4 Countries

The Impact of Leadership Style on Seller’s Transfer Price: The Moderating Role of Compensation Scheme

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