Discuss the theory of Transfer Pricing in relation to competitiveness, Essay

Discuss the theory of Transfer Pricing in relation to competitiveness, management, minimisation, avoidance and internal concerns. Use the theory as basis for a - Essay Example Optimal transfer pricing techniques are adopted by MNCs to maximize profits within the organization through tax liability avoidance (Keegan and Green 2005). The strategic imperatives behind transfer pricing efforts include a desire to have a competitive edge over rivals, minimize costs or maximize revenue, maximize strategic management-related gains such as x-efficiency and above all establishing market leader status. Any MNC would introduce its product into a foreign market by using transfer pricing as a very attractive pricing strategy within the organization itself. The first and foremost strategic initiative is to arrive at an overall estimate of the organization’s cost structure and its composition such as the amount of fixed cost, variable cost, average cost and marginal cost. Then the firm would look at its revenue flow estimates such as the total revenue, average revenue and marginal revenue. An MNC would adopt optimal transfer pricing strategy and its variants to achieve organizational goals and corporate objectives as an MNC across the world (Elliot and Emmanuel 2000). This paper would examine in detail the Japanese market for Xbox 360 with the main focus on strategic transfer pricing techniques that would be adopted by Microsoft in Japan to achieve its main organizational aims. Thus, its remit would include such international marketing concepts as strategic market/customer/product/competitor orientation, and tactics like the principle of maximum product differentiation. It is not unusual for MNCs to apply transfer pricing in a variety of international business contexts. Video game console market in the world has not only been noticed to possess some peculiar characteristics but also it has intrinsically developed unique trend of extrapolation in conformance with cross self-entertainment specificities across a series

Social responsibility of business Essay Example | Topics and Well Written Essays - 1000 words

Social responsibility of business - Essay Example Given the traits of a sentient being, while dismissive of any moral or ethical responsibility, the state of the corporation is placed in a space between responsibilities. The responsibility of the corporation to its owners relieving it of any responsibility to society, the shareholders are relieved of blame because they are largely unaware of the day to day decision making, while the CEO is relieved of blame because he is making decisions that support the interests of the owners. As Friedman makes his argument, he is discussing the concept of corporation in the framework of the shareholder model of corporate governance, which is the more popular form of governance in the United States. UK corporations also uses this model as the foundation of its principles of governance, but Japan, Germany, and most of the other European states use the stakeholder model of corporate governance (Barker 2010: 33-35). Friedman states that â€Å"In a free enterprise, private property system, a corporat e executive is an employee of the owners of the business... (His) responsibility is to conduct the business in accordance with their desires†. ... According to what Friedman (1970) is presenting, his belief supports the idea that businesses should rise and fail according to the ability to scramble to the top or get lost in the battle towards that end. The current issues that dairy farmers are faced with are an example of why this belief system is not conducive to sustainability. Food growth and nurturing is one of the more important industries for all human societies. Dairy farmers have had an increasingly difficult time in the UK and have been disappearing as a consequence. Evidence of the difficulties of dairy farms is that there were 300 dairy farms on the Isle of Wight during the 1960s, but only 15 remain (Findon 2010). Supermarkets are unwilling to pay a decent price to the farms and in the end they are forced to close their doors. Although those that are still left have been hoping that the price of dairy would rebound, it has stayed at a steady low, creating a business dynamic through which the costs of keeping their doo rs open is more than the benefit of maintaining their business (Findon 2010). In the case of the dairy farms, the stakeholder model of corporate governance must be put into place in order to create sustainability. Dairy products are necessary in the public domain, but high prices on dairy products do not do anything good for anyone. At the same time, dairy farms need to be able to sustain their position or they are only spinning their wheels and falling towards the inevitability of failure, which might cause a natural correction in prices due to scarcity of the product, but is not in the best interests of anyone. Darwinian thinking about businesses creates a dynamic