Use the Internal Conversion Rates in Evaluating the Performance of the Enterprise Departments
Prof. Abdul Khaliq M. Al-Rawi, Bilal E. Al-Ribeihat

Abstract
The research aims to identify the possibility of using the conversion rates by the organizations in the duly accredited methods in determining the price (market-based conversion rates, cost-based conversion rates, negotiation-based conversion rates) in assessing the performance of its departments. The community of the study included the Jordan companies listed on the Amman Exchange Stock, which are (255) companies. The sample of the study consisted of (188) respondents of the financial managers and employees of Finance Departments in the public shareholding companies. A main questionnaire has been used to collect the data. The results focused on analyzing (188) questionnaires collected from the sample of the study. The results showed that the companies being studied apply the conversion prices based on the market in evaluating the performance of their different departments in high degree, while using the conversion rates in the evaluation of such departments by using the cost-based and negotiation-based in medium degree. The results also show that the conversion prices contribute to research in the reasons of deviations resulting from comparisons between the plans and the actual results of the combined centers. Moreover, the companies depend on the conversion prices in designing the future strategic planning to develop their departments. In the light of the findings a number of recommendations have been presented, most notably the companies continue using the conversion prices in evaluating performance of their departments. The study also recommended the need of the other companies, which do not use the conversion prices should use the them and provided the required capabilities for this purpose due to the direct effect on the performance assessment and delineation of responsibilities, as well as making sure that they authorize the departments to make the necessary decisions because doing so would reduce the costs of their centers, and help improve the efficiency of the company performance.

Full Text: PDF