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Chapter 9

Divisional performance appraisal and

transfer pricing

Outcome

By the end of this session you should be able to:

 discuss the problems encountered in managing performance in divisional
structures

 describe, compute and evaluate performance measures relevant to a
divisionalised organisation structure including ROI, RI and EVA

 apply and evaluate the value-based management approaches to performance
management

 discuss the circumstances in which a transfer pricing policy may be needed and
discuss the necessary criteria for its design

 demonstrate and evaluate the use of alternative bases for transfer pricing

 explain and demonstrate issues that require consideration when setting transfer
prices in multinational companies

and answer questions relating to these areas.

The underpinning detail for this chapter in your Integrated Workbook can
be found in Chapter 9 of your Study Text

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