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Road Enterprises is a multi-divisional manufacturer of technology-based solutions for the solar-panel industry. CEO Georgina Martinez is happy for divisions to act as autonomous work-units; which she calls investment centres. This seems to have worked successfully in the past with all three divisions having consistently met their financial targets.

The existing transfer pricing policy at Road Enterprises is: full sourcing autonomy and use of the negotiated method, where the prevailing market price is generally used as the starting point of negotiations. Approximately 50% of each divisions' activity is currently transferred internally. Georgina would like this to increase in the future. Given there is sourcing autonomy, disputes often arise; in which case, Valencia Yang is assigned the task of finding a resolution.

Road Enterprises CEO: Georgina Martinez asked Yang about the different transfer pricing methods available for use. She wondered if the transfer pricing method made any likely difference to the decision-making by divisional managers. Given Georgina's query, which of the following is more likely to be true:

Group of answer choices

1. The transfer pricing method has no impact on the nature of decision-making by divisional managers
2. The transfer pricing method will only influence decision-making in a decentralised organisational structure
3. Decision-making is only influenced by the extent of sourcing autonomy for divisional managers.
4. The transfer pricing method will influence the nature of decision-making by divisional managers

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