Research design and methodology

849 Finally, to eliminate any recording errors, transcriptions were checked for context and content accuracy prior to data analysis. Information gathering via survey questionnaire was carried out at two levels: 1 corporate; and 2 division. Much of the prior empirical research on transfer pricing has been done with firm-level surveys e.g., Tang, 1979; Vancil, 1979; Borkowski, 1990. Colbert and Spicer 1995 conclude that such studies resulted in limited understanding and insights because they were directed at the level of the firm as a whole rather than at the divisional level where internal transfers actually take place. Constructs were developed using Churchill‘s 1979 guidelines. The questionnaire was developed based on a thorough review of the literature and feedback from the reviewers. Responses to scales that were designed to capture value dimensions were made on 5-point Likert scales anchored by strongly disagree and strongly agree at the end points 1 and 5, respectively. Because of the exploratory nature of the current research, interview and questionnaire questions were drawn largely from the extant literature with a particular emphasis on the works of Parasuraman et al. 1988, Sweeney and Soutar 2001 and Emmanuel and Mehafdi 1994. Prior to mailing, the questionnaire was pre-tested on eight academics two of whom had extensive top level relevant industry experience. In the light of their feedback, appropriate revisions were made. The questionnaire was accompanied by a letter describing the research and its purposes, soliciting participat ion and assuring respondents‘ anonymity. A reply-paid envelope was provided for returning the completed questionnaires. A two-part questionnaire one to be filled by corporate staff and the other by divisional managers was addressed and mailed to the Chief Executive Officer or Manager of Human Resources as the case may be. 850 The addressee was requested to pass on the part of the questionnaire designed for the divisional management to a divisional manager of hisher choosing within their organisation with the appropriate knowledge. Following Phillips 1981 who reports that high-level managers provide more reliable information on organisational phenomena than do lower ranking managers, questionnaire directed to corporate staff solicited answers to questions of general and strategic nature. Questionnaire designed for divisional manager‘s completion contained questions relevant to intra-departmental exchange of services. In conclusion, the ―benefits‖ construct is designed to encompass assurance, responsiveness, reliability, empathy, tangibles, flexibility and innovation and alternate solutions and customization and ―sacrifice‖ construct includes price, time, effort and energy, and psychic costs. Two waves of mail surveys were sent four weeks apart To assess non-response bias, the responses received from the first mailing were compared to those responses received after the second mailing using a Mann-Whitney test, and no significant differences were detected between the two waves among the studied variables suggesting that non-response bias is not evident. For missing data analysis, the listwise deletion option was employed

2. Discussion of findings

Profile of respondents. A total of 80 usable responses were available for analysis representing a response rate of 28.07 percent. The breakdown of respondents is shown in Table 1. 851 Table 1 Profile of respondents Survey Questionnaire Interviews held Service categories Usable response Number of firms interviewed Number of interviews conducted Transportation and storage 12 15.0 1 1 Telecommunications 8 10.0 2 5 Healthcare services 7 8.7 1 1 Finance and insurance 30 37.5 3 3 Property and business services 23 28.8 3 3 TOTAL 80 100.0 10 13 Fifty-five percent of respondents had an annual turnover of AUD 80 million and 24 had an annual turnover of AUD 40-80 million, and the remainder had a turnover of less that 40 million. Objectives of transfer pricing. Transfer pricing policies generally aim to achieve goal congruence Abdallah, 1989. It is argued that unless the company acknowledges the importance of internal customers, these internal intermediaries may have different goals and, as a consequence, employees involved in the internal service delivery, even those who wish to be good stewards, may inadvertently set goals that would be different from those set if information flowed perfectly Evans, 1975. Ease of understanding is the most important objective of the transfer pricing system followed by optimal pricing and goal congruence Table 2.