Transfer prices can be used to promote goal congruence among operating segments of an organization.

Question

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Transfer prices can be used to align the goals of different operating segments within an organization, encouraging cooperation and collaboration instead of competition or conflict. By establishing fair and transparent prices for internal transfers of goods or services, managers can ensure that each segment is motivated to maximize overall profits rather than just their own individual performance. This can help to create a more cohesive and efficient organization, with greater emphasis on teamwork and coordination.

Transfer Prices Can Be Used to Promote Goal Congruence Among