We show how information technology affects transfer pricing. With coarse information technology, negotiated transfer pricing has an informational advantage: managers agree to prices that approximate the firm's cost of internal trade more precisely than cost-based transfer prices. With...

Building on new insights from organizational economics, management accounting researchers have highlighted how incentive contracts and performance measure choices complement structural arrangements in firms. We discuss how “slow moving” elements in organizational design, such as the...

In this paper, we analyze the impact of organizational structure on incentives within a LEN-framework with agents on three hierarchical levels (bottom, middle, top), where the performance measures used for incentive design originate at the bottom-level. Previous literature has shown that with...

We examine how performance management practices that render employee accomplishments transparent in an organization depend on employees’ hierarchical level. We consider a principal-agent model of an organization where the principal contracts directly with a group of higher-level agent-workers...