Publications
Publications
- October 1988 (Revised December 1989)
- HBS Case Collection
Siemens Electric Motor Works (B): Pricing Interdivisional Sales
Abstract
Examines Siemens' policy for pricing products transferred between the manufacturing and sales divisions of their Electric Motor Works, where both are profit centers. It is unique in that the organizational linkage between the product costing system and the transfer pricing system is highlighted. The issues raised center around the behavior induced by the transfer pricing system coupled with each manager's incentive to increase divisional profits. In addition the students will have an opportunity to discuss the appropriateness of both the transfer pricing system and the profit center structure of the organization.
Keywords
Citation
Wruck, Karen. "Siemens Electric Motor Works (B): Pricing Interdivisional Sales." Harvard Business School Case 189-090, October 1988. (Revised December 1989.)