What Is Not an Objective When Establishing Transfer Prices

question 31

Multiple Choice

What is not an objective when establishing transfer prices?

• A)Reduction of taxes and tariffs
• B)Avoidance of conflicts with home and host governments
• C)Goal congruence and motivation of subsidiary managers
• D)Reduction of taxes and tariffs; avoidance with conflicts with home and host governments; and goal congruence and motivation of subsidiary managers.

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Definitions:

Social Identity Theory

A psychological theory proposing that people classify themselves and others into various social categories, such as racial groups or sports teams, which influences their behaviors and perceptions.

Social Dominance Theory

A theory suggesting that societies are structured in hierarchical group systems, with inequalities maintained through mechanisms such as discrimination and systems of oppression.

Status Position

The rank or standing of an individual or group within a societal or organizational hierarchy.

Group Cohesion

A property of a group, specifically the degree to which members of a group desire to remain in that group and resist leaving it. A highly cohesive group will maintain a firm hold over its members’ time, energy, loyalty, and commitment.