Proceedings of the International Conference on Economics, Management and Accounting (ICEMAC 2021)

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The Impact of Leadership Style on Seller’s Transfer Price: The Moderating Role of Compensation Scheme

Authors
Fitri Mareta1, *, Aryan Danil Mirza2
1Accounting Study Program, Faculty of Business and Humanities, Nusa Putra University, Indonesia
2Universitas Lampung, Indonesia
*Corresponding author. E-mail: fitri.mareta@nusaputra.ac.id
Corresponding Author
Fitri Mareta
Available Online 10 February 2022.
DOI
10.2991/aebmr.k.220204.030How to use a DOI?
Keywords
Leadership Style; Locus of Control; Budgetary Slack
Abstract

Transfer pricing can lead to conflicts between divisions. This is because the seller tends to charge a higher transfer price than the buyer. Therefore, this study examines whether the type of leadership and compensation scheme can influence the seller’s transfer price decision to approach an equal profit. This study uses a 2x2 factorial design experimental method on the leadership type variable (supportive vs. non-supportive) and compensation scheme variable (high bonus percentage vs. low bonus percentage). This study indicates that sellers will set transfer prices close to equal profits when under supportive leadership. This is because the type of supportive leadership supports a collaborative work climate and focuses on achieving common goals. In addition, the seller will charge a transfer price close to the equal profit when the compensation scheme has a low bonus percentage. The low bonus percentage is not strong enough to bring out the egocentrism of the seller. The influence of a compensation scheme with a standard bonus percentage will be more substantial if a supportive leadership type supports it. This study provides knowledge to companies to formulate effective strategies to reduce transfer price negotiation conflicts by considering the kind of leadership and compensation schemes.

Copyright
© 2022 The Authors. Published by Atlantis Press International B.V.
Open Access
This is an open access article under the CC BY-NC license.

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Volume Title
Proceedings of the International Conference on Economics, Management and Accounting (ICEMAC 2021)
Series
Advances in Economics, Business and Management Research
Publication Date
10 February 2022
ISBN
978-94-6239-532-9
ISSN
2352-5428
DOI
10.2991/aebmr.k.220204.030How to use a DOI?
Copyright
© 2022 The Authors. Published by Atlantis Press International B.V.
Open Access
This is an open access article under the CC BY-NC license.

Cite this article

risenwbib
TY  - CONF
AU  - Fitri Mareta
AU  - Aryan Danil Mirza
PY  - 2022
DA  - 2022/02/10
TI  - The Impact of Leadership Style on Seller’s Transfer Price: The Moderating Role of Compensation Scheme
BT  - Proceedings of the International Conference on Economics, Management and Accounting (ICEMAC 2021)
PB  - Atlantis Press
SP  - 282
EP  - 289
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.220204.030
DO  - 10.2991/aebmr.k.220204.030
ID  - Mareta2022
ER  -