A transfer-pricing method leads to goal congruence when managers:
A)act in their own best interest and the decision is in the short-term best interest of the company.
B)act in their own best interest and the decision is in the long-term best interest of the company.
C)act in their own best interest and the decision is in the long-term best interest of the manager's subunit.
D)always act in their own best interest.

Question

Quizplus · Accepted Answer

Goal congruence occurs when the interests of individual managers align with the overall goals of the company. In transfer-pricing, managers must make decisions that benefit their subunit, but also consider the long-term best interest of the company as a whole. Option B aligns with this approach as it includes both individual (acting in their own best interest) and overall company goals (long-term best interest), while options A, C, and D do not fully consider both individual and company goals.

A Transfer-Pricing Method Leads to Goal Congruence When Managers