Abstract
Some recent literature shows the cases of endowing line organizations with profit responsibility as ones of management accounting practices in Japan. This paper examines the case of SEIREN Corporation to analyze the mechanism of generating profits between line organizations as profit centers (PCs). This paper concludes that they are mutually reinforced by the tension between two powers. One is the power of a marketing department’s power negotiating transfer prices, which is reinforced by the fact that a manufacturing department is responsible for profit. The other is the power of a manufacturing department intensified by the existence of the production system which is the source of competitive advantage of SEIREN’s products.
