Managing a Double-Edged Sword: The Paradoxical Dynamics of Participative Development of Pricing Control

ABSTRACT This study presents a field investigation into the dynamics of developing pricing control designs between the global headquarters of a large multinational company and its most important sales subsidiary. The paper employs a paradox theoretical lens to analyze the development of pricing control designs through employee participation. We report two key findings. First, we outline contradictions between a decentralized, subjective approach and a centralized, financial approach to pricing, conceptualizing the tensions underlying this dilemma. Second, we conceptualize the paradoxical features of the centralization–decentralization dilemma, focusing on how processes switch between virtuous and vicious cycles. We find that employee participation in development processes paradoxically advances and undermines the development of centralized pricing control designs. JEL Classifications: M41; M42; C990.