Concentrating the enterprises provokes an increase in size of the groups which choose to use decentralized structures. The imperatives of international commerce and profitability led to a growth in number and dimension for the production units and as a consequence a continuous development of inter-group exchanges. A large amount of goods and services provided by some units, if not the whole amount, is sold to other units belonging to the same group.
A unit or division is a responsibility centre where the manager is responsible for both production and marketing decisions and for those concerning supplying the resources needed. Each responsible interferes not only on the different kinds of expenses, but also on the revenues of his own unit/department/division/enterprise, which are more and more analyzed as profit centers.
The transferring price is a key parameter of management, and the way it is determined not be abandoned to producers or merchants. The management cost controller must ease their task, by using his market and cost analysis knowledge and experience, help them find the correct price.
The transferring price is a major crossroad which reflects the balance between the various constraints resulted from groups strategic choices (market share, profitability level and place of occurrence), autonomy level granted to different managers to achieve the objectives of their profit centers.