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Autonomy

The degree of freedom to make decisions.

Decentralization

The freedom for managers at lower levels of the organization to make decisions.

Dual Pricing

Approach to transfer pricing using to two separate transfer methods to price each transfer from one subunit to the other.

Dysfunctional Decision Making

Another term for suboptimal decision making. Dysfunctional Decision Making

Effort

Exertion toward achieving a goal.

Goal Congruence

Exists when individuals and groups work toward achieving the organization's goals. Managers working in their own best interest take actions that align with the overall goals of top management.

Incongruent Decision Making

Another term for suboptimal decision making. Incongruent Decision Making

Intermediate Product

Product transferred from one subunit to another subunit of an organization. This product may either be further worked on by the receiving subunit or sold to an external customer.

Management Control System

Means of gathering and using information to aid and coordinate the planning and control decisions throughout an organization and to guide the behavior of its managers and employees.

Motivation

The desire to attain a selected goal (the goal congruence aspect) combined with the resulting pursuit of that goal (the effort aspect)

Perfectly Competitive Market

Exists when there is a homogenous product with buying prices equal to selling prices and no individual buyers and sellers can affect those prices by their own actions.

Suboptimal Decision Making

Decisions in which the benefit to one subunit is more than offset by the costs or loss of benefits to the organization as a whole.

Transfer Price

Price one subunit (department or division) charges for a product or service supplied to another subunit of the same organization.

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