Market‐orientated accounting: information for product‐level decisions

Abstract

Purpose

The paper's purpose is to explore and describe the interface between the customer component of a market orientation and the accounting information used in making product‐level decisions.

Design/methodology/approach

Exploratory/descriptive organisational case study of a multi‐function product decision‐making setting. Development of a model of the customer‐accounting information requirements of a market orientation.

Findings

Describes how customer‐orientated product decisions are guided by managers' shared understanding of product‐attributes and conceptions of a “product” as a “bundle of attributes, benefits or characteristics”. Describes the limited accounting function involvement in product‐decisions and the use of customer‐orientated and non‐financial decision criteria.

Practical implications

A market‐orientated approach to business has been associated with increased business performance. The identification and integration of information from the management accounting discipline facilitates the understanding of the resource costs of satisfying individual customer needs and assists in operational level decisions. The authors highlight potential barriers to the integration of customer‐orientated accounting information in product decisions.

Originality/value

There remains a scarcity of marketing and management accounting interdisciplinary case research at the product‐attribute decision‐making level. The organisational study provides an insight into the decision‐making information and processes at the market orientation and management accounting interface. A framework and suggestions for the further development of interfunctional product‐level decision‐making are provided.

Citation

Inglis, R. and Clift, R. (2008), "Market‐orientated accounting: information for product‐level decisions", Managerial Auditing Journal, Vol. 23 No. 3, pp. 225-239. https://doi.org/10.1108/02686900810857695