Why Pricing Decisions Should Never Be Left to a Single Person

The price is always decided by someone

A common misconception often lurks in companies without formal pricing governance: the idea that “no one really decides” on the price, since there is no dedicated role for it. This is inaccurate. The price is always decided—by someone, somewhere, at some point. It’s just that this decision remains diffuse, informal, and, more often than not, made by a single person.

A sales rep offers a discount to close a deal. A category manager matches a competitor’s price without consulting the finance department. An executive makes a decision on his own, under pressure, in response to a rise in material costs. Each of these decisions is justified in the moment—and each commits the company to a course of action that far exceeds the authority of the person making it.

This observation directly echoes the point made in the lead article of this special report: the absence of a dedicated pricing function does not mean there are no pricing decisions. It means that these decisions remain scattered among several people, each acting from their own perspective, without coordination.

This fragmentation is not unique to small organizations. In large organizations as well, a regional director, a category manager, and a sales director may each adjust a price for reasons that make sense locally, without any of the three having insight into the decisions of the other two. The size of the company does not eliminate the problem—it simply makes it harder to detect, as it gets lost in the volume of daily transactions.

The Risk of Making Decisions Alone

A pricing decision made by a single department almost always optimizes a single dimension at the expense of others. A sales representative focused on closing a sale underestimates the impact on margin. A finance professional focused on margin underestimates the commercial feasibility. A marketer focused on price perception underestimates actual profitability.

None of these perspectives is wrong. Each is simply incomplete —and it is this incompleteness, repeated decision after decision, that results in an inconsistent pricing policy at the company level, without anyone being individually responsible for it.

The second criterion in this study is worth highlighting: aligning sales incentives with pricing strategy inherently assumes that sales and pricing do not operate in silos. This is a direct empirical argument in favor of a shared decision-making process rather than a fragmented one.

The risk isn’t just financial. A single pricing decision, repeated over time, also creates inconsistencies that are visible from the outside: two comparable customers receiving different terms depending on which representative handled their case, and a pricing image that varies from one region to another with no apparent logic. This inconsistency undermines trust—both internally and externally—long before it translates into a measurable loss in profit margin.

Who should be at the table?

To put it another way: not all stakeholders need to be consulted for every price change. However, a significant adjustment—such as a change in pricing policy or a structural increase—should always take into account at least two of these four perspectives before a decision is made.

How AI Is Changing—and Not Changing—This Form of Governance

The emergence of tools capable of recommending—or even automatically setting—a price might lead one to believe that the issue of collective governance is becoming secondary: the algorithm would perform the calculation, and individual decision-making would give way to a neutral calculation.

This is a fallacy. An algorithm trained to maximize a single metric—margin, volume, conversion—reproduces exactly the same bias as a decision made by a single human focused on a single dimension. The difference is that this bias becomes invisible, hidden behind the apparent objectivity of the calculation.

This finding confirms what Booper has always maintained: AI should empower collective decision-making—by gathering data, simulating scenarios, and providing an objective perspective on trade-offs—but should never replace it. Humans steer; algorithms provide insight.

This distinction is not merely a matter of principle. An algorithm that recommends a price but leaves the final approval to a group leaves a trail: we know who approved what, and on the basis of what data. An algorithm that decides on its own, on the other hand, turns governance into a black box—no one can explain why a price is what it is, which exactly replicates the problem of diffuse accountability described at the beginning of this article.

Building collective governance, without an overly complicated system

A Real-World Example of Large-Scale Governance

Mistakes That Undermines Collective Governance

• Confusing collective governance with a committee that rubber-stamps everything. A governance structure that slows down every decision ends up being circumvented—it must reserve cross-validation for decisions that warrant it.
• Let the AI make decisions without supervision. An algorithm optimized for a single metric replicates the bias of a decision made by a single person—and is even harder to detect.
• Never document who decided what. Without a record, collective governance dissolves within a few months and, in practice, reverts to a collection of uncoordinated individual decisions.
• Failing to involve management in key decisions. A change in pricing policy that does not have management's commitment lacks the legitimacy to withstand initial internal resistance over the long term.

The topic of collective governance is directly related to that of continuous price review, discussed elsewhere in this issue: a shared decision only makes sense if it is repeated regularly, not just once at the outset.

FAQ

‍

Also in this series

• Why Do So Few Companies Actually Manage Their Prices?
• The price isn't set in stone: why it's a dynamic variable
• "We're not selling because we're too expensive": What if the problem lies elsewhere?

Sources: Bain & Company, “Is Pricing Killing Your Profits?”, June 13, 2018 · Simon-Kucher, “Global Pricing Study 2025”