Incentive Systems in the Electronics Industry – A Case Study

Abstract

Incentive systems form an integral part of effective management control systems. Respective targets need to be grounded in measurable data, which is often provided through costing information and transfer pricing. This case study explores how the aforementioned tools help a division of an electronics company in optimizing its product profitability. In particular, it draws attention to some behavioral considerations that originate from data-driven control systems. This study can be used as an instructional exercise in graduate and executive education.