Pricing is supposed to be the red thread that runs through a company. It connects strategy to the shelf, product to sales, the boardroom to the individual deal. Every price a customer pays carries the decisions of many departments.
So here is an irony I keep running into: in large organizations, the pricing function itself is not united.
Look at how pricing is actually organized in a big company. A central team at headquarters sets list prices, guidelines and tools. Pricing managers in each business unit look after their own portfolio and defend their own P&L. Commercial excellence people in local markets sit closer to customers and to sales. Add a deal desk here, a revenue management team there. In one division pricing reports to finance, in another to marketing.
Each of these teams is competent. Each is doing its job. The problem is what happens between them.
Where the loopholes are
The loopholes in pricing rarely sit inside a team. They sit in the handoffs.
Headquarters sets the price, the market sets the discount. The central team builds a list price on value and positioning. The local team, measured on volume, grants whatever discount gets the deal done. Each decision is reasonable on its own. Together, the net price lands somewhere nobody designed and nobody owns.
Business units price the same customer differently. A key account buys from three BUs. Each BU negotiates alone, with its own discount logic. The customer sees the whole picture. The company does not. Guess who wins that negotiation.
Launch pricing and lifecycle pricing never meet. One team prices a new product with care. After launch it is handed to another team, and the original logic stays in a slide deck nobody opens again. Two years later, nobody can explain why the price is where it is.
Policy and practice drift apart. The guideline says one thing, the system allows another, and local practice is a third. Each team believes the gap is someone else's problem.
None of these is a failure of competence. They are failures of handoff and alignment.
The leaks in pricing are rarely inside a team. They are in the space between teams.
Why size makes it worse
In a small company, the person who sets the price often sits next to the person who negotiates it. Misalignment is visible and gets fixed over lunch.
In a large organization, every new layer, region or business unit adds another interface, and every interface is a place where intent gets lost. Information travels slower, ownership blurs, local incentives pull in different directions. The bigger the organization, the more interfaces, and the more leakage.
There is a quieter reason too. Large organizations reward teams for their own results. The BU pricing manager is measured on BU margin, the local team on market volume, the central team on rolling out tools and policies. Nobody is measured on whether the system as a whole holds together. So nobody fixes it.
United does not mean centralized
The instinctive answer is to centralize: one team, one process, one tool. In my experience this rarely lasts. Local markets know things headquarters does not. Business units do serve different customers. Remove local judgment and you create a new set of problems.
A united pricing function is not one where everyone reports to the same person. It is one where:
Who sets list prices, who owns discounts, who approves exceptions. Written down, not assumed.
When a price moves from one team to the next, the logic travels with it.
The same data, the same definitions, the same view of net price across BUs and markets.
Teams adapt, but within a logic everyone understands.
Not every price, but the coherence of the system.
A simple test
If you lead pricing in a large organization, ask three questions:
If the answers are uncomfortable, the problem may not be your prices. It may be your pricing organization.
Also available in Chinese: 定价职能，自己先散了