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Article
Publication date: 5 November 2021

Leonardo Sedevich-Fons

The specific purpose of this article is to describe customer profitability analysis and evaluate its compatibility with quality management systems. Besides, its more…

Abstract

Purpose

The specific purpose of this article is to describe customer profitability analysis and evaluate its compatibility with quality management systems. Besides, its more general objective consists in shedding further light on the links between management accounting and quality management, which is still an emerging topic.

Design/methodology/approach

The first part of the document presents a theoretical description of the disciplines and tools that are relevant to the study. Afterward, an explanation of the way in which customer profitability analysis is operationalized in practice is provided. Subsequently, a framework for the incorporation of customer profitability analysis into a quality management system is introduced. The final section includes some recommendations for future research.

Findings

Through the analysis of the benefits of the incorporation of customer profitability analysis into an ISO 9000 model, the study provides further support to the premise that the joint consideration of management accounting techniques and quality management tools is beneficial to organizations.

Originality/value

The article combines two disciplines closely related in practice but seldom concurrently addressed in the literature.

Details

The TQM Journal, vol. 34 no. 6
Type: Research Article
ISSN: 1754-2731

Keywords

Article
Publication date: 26 July 2018

Frederick Ng and Zack Wood

This paper aims to problematise critiques raised against customer accounting’s numeric focus, which risks controlling and simplifying customers rather than facilitating…

Abstract

Purpose

This paper aims to problematise critiques raised against customer accounting’s numeric focus, which risks controlling and simplifying customers rather than facilitating closer engagement. This analysis suggests ways to better account for what it is that customers buy, why they do so and how to better serve them.

Design/methodology/approach

Service-dominant logic (SDL) is a marketing ideology that recognises the active role of customers in value creation. Seven customer accounting techniques are appraised against SDL principles to identify strengths and shortfalls in logic and application.

Findings

Customer accounting techniques align with SDL’s beneficiary-oriented and relational view of customers. Weaker alignment is found regarding a focus on outputs rather than outcomes, silence about the customer’s role in co-creating value and failure to recognise contextual circumstances.

Research limitations/implications

The analysis uses prototypical descriptions of customer accounting techniques. Actual applications could offset weaknesses or raise other shortfalls.

Practical implications

For each area of SDL, the authors suggest avenues for integrating SDL into customer accounting using related literature and building on concepts within customer accounting techniques.

Originality/value

SDL contrasts with the traditional, goods-dominant logic that underscores much of accounting. SDL is used to critically and constructively evaluate customer accounting techniques.

Details

Pacific Accounting Review, vol. 30 no. 3
Type: Research Article
ISSN: 0114-0582

Keywords

Article
Publication date: 1 July 2007

Beverley R. Lord, Yvonne P. Shanahan and Benjamin M. Nolan

As Lindsay (1994, 1995) encourages validation of existing results, this research replicates Guilding and McManus (2002) in a New Zealand (NZ) context. The usage and…

Abstract

As Lindsay (1994, 1995) encourages validation of existing results, this research replicates Guilding and McManus (2002) in a New Zealand (NZ) context. The usage and perceived merit of customer accounting practices were lower in NZ than in the Australian study. Few of the regressions where customer accounting usage and perceived merit were dependent variables revealed a statistically significant role for competition intensity and market orientation. There was some minor support for the perceived merit of customer accounting being higher in companies experiencing medium levels of competition intensity.

Details

Accounting Research Journal, vol. 20 no. 1
Type: Research Article
ISSN: 1030-9616

Keywords

Article
Publication date: 6 February 2007

Neale G. O'Connor and Cecilia L.K. Cheung

The purpose of this research is to investigate the joint influence of early product adoption and bank customer accounting in Hong Kong.

1067

Abstract

Purpose

The purpose of this research is to investigate the joint influence of early product adoption and bank customer accounting in Hong Kong.

Design/methodology/approach

In‐depth interviews at three Hong Kong banks provided the basis for designing a survey instrument, which was used to collect data from 35 local and overseas banks. Performance data were collected from the financial statements published by the banks

Findings

Findings revealed significant interactive influences of early product adoption and customer accounting practices on bank performance. That is, performance would be enhanced if customer accounting practices were used to a greater extent in those banks that were early in adopting a greater range of products. The evidence shows that bank performance in an intensely competitive market such as Hong Kong is driven by the fit between customer accounting practices and early product adoption strategies.

Research limitations/implications

This paper is subject to small sample size and the use of a cross‐sectional sample setting.

Originality/value

The evidence that is provided in this study adds to the understanding of the relationship between management accounting and organisational strategy. The topic is of interest given the recent deregulation of the banking industry in Hong Kong and the expansion of products that have been offered by banks during the last five years.

Details

Pacific Accounting Review, vol. 19 no. 1
Type: Research Article
ISSN: 0114-0582

Keywords

Article
Publication date: 4 January 2008

Suresh Cuganesan

The purpose of this research is to examine the role of accounting numbers in one organisation's attempts to enact and calculate customer intimacy, given renewed interest…

4313

Abstract

Purpose

The purpose of this research is to examine the role of accounting numbers in one organisation's attempts to enact and calculate customer intimacy, given renewed interest in organisation‐customer relationships.

Design/methodology/approach

The paper utilises actor‐network theory in conducting an ethnography at a wholesale financial services firm pursuing a strategy of customer intimacy. The main empirical site was the sales and marketing department, where actors were attempting to further their knowledge of customer needs in the present and anticipate them into the future.

Findings

The paper finds heterogeneous enactments of “customer intimacy” through a “numeric calculation network” and a “sales calculation network”. The former sought to use accounting numbers to calculate how customer intimacy was enacted and impose upon a sales‐force periphery a regime of performance measurement. The latter eventually destabilised the proposed performance measures by promoting their own basis for calculating customers. These were more diverse and “implicit”, comprising talk and communication through co‐location and proximity with customers.

Originality/value

The paper provides a number of insights into the role of accounting as a calculative practice. The observed emergence of novel means of producing accounting numbers outside the domain of the accounting function and within the sales and marketing department has important implications for the practice and study of accounting. In addition, potential limits to the use of accounting in enabling “action at a distance” are identified through the observed contest between “hard” accounting' numbers and softer modes of calculation.

Details

Accounting, Auditing & Accountability Journal, vol. 21 no. 1
Type: Research Article
ISSN: 0951-3574

Keywords

Article
Publication date: 18 April 2017

Matthew Fish, William Miller, D’Arcy Becker and Aimee Pernsteiner

The purpose of this paper is to examine the role of organizational culture as a company migrates through a four-stage model for designing a performance measurement system…

1718

Abstract

Purpose

The purpose of this paper is to examine the role of organizational culture as a company migrates through a four-stage model for designing a performance measurement system (PMS) focused on customer profitability.

Design/methodology/approach

This is a single-site phenomenological case study, at Growth Spurt Marine Accessories (Growth Spurt), a manufacturing organization headquartered in the USA. Data were collected over a two-year period through interviews with accounting staff, internal company documents and recording observational notes.

Findings

The paper identifies three major factors that prevented Growth Spurt from transitioning its customer profitability analysis (CPA) reporting package through Kaplan and Cooper’s four-stage model of PMS design: executives exerting their power and spending political capital to prevent implementation without providing rationale, executives believing that the allocation methods were too subjective and executives relying on their own intuition in analyzing customer profitability rather than relying on data. These factors suggest that organizational culture plays an important role in migrating a customer-focused profitability PMS through Kaplan and Cooper’s four-stage model of PMS system design.

Research limitations/implications

The findings suggest that a PMS focused on customer profitability that does not advance beyond Stage II (financial reporting-driven) may still suit the needs of an organization. Additionally, managers should advocate for a multidisciplinary PMS design and implementation team to minimize potentially adverse effects of organizational culture.

Originality/value

This paper is unique because it applies Kaplan and Cooper’s four-stage model for PMS design to CPA and it uses a phenomenological case approach to explore impediments to a comprehensive CPA implementation.

Details

Qualitative Research in Accounting & Management, vol. 14 no. 1
Type: Research Article
ISSN: 1176-6093

Keywords

Article
Publication date: 1 August 2000

Jørn Flohr Nielsen, Per Nikolaj D. Bukh and Niels Peter Mols

In the retail financial sector competitive pressure seems to challenge traditional management accounting systems, which often do not allow the identification of profitable…

3931

Abstract

In the retail financial sector competitive pressure seems to challenge traditional management accounting systems, which often do not allow the identification of profitable customer relationships. Drawing on a stage model and data from management accountants, branch managers and frontline employees in Danish financial service companies, this article investigates barriers to the implementation of customer‐oriented management accounting. The article documents how financial institutions are increasingly integrating management accounting systems with customer‐related activities thus enabling customer profitability analyses. However, several barriers related to organization structure, resources and attitudes hamper further customer‐oriented changes. Data gathered at the branch level strongly indicate problems of ownership and project sponsoring, and it is argued that new accounting systems may be less important to customer orientation than empowerment and goal‐oriented participation of the frontline employees.

Details

International Journal of Service Industry Management, vol. 11 no. 3
Type: Research Article
ISSN: 0956-4233

Keywords

Article
Publication date: 9 September 2022

Emerson Wagner Mainardes and Gerlane da Silva Sousa

This study aims to verify the dimensions of perceived quality of services which influence the satisfaction of accounting firm clients and verifies whether customer

Abstract

Purpose

This study aims to verify the dimensions of perceived quality of services which influence the satisfaction of accounting firm clients and verifies whether customer satisfaction influences loyalty and word-of-mouth recommendations.

Design/methodology/approach

A model is proposed and tested using a survey of 292 accounting firm clients; structural equation modeling and partial least squares are used for data analysis.

Findings

The constructs of internal policies, personal relationships and trust influence the satisfaction of accounting firm clients which directly influences word-of-mouth recommendations and customer loyalty; however, the constructs of physical aspects and problem solving have no influence on satisfaction.

Research limitations/implications

The main contribution to the accounting field is an identification of the aspects in which firms should invest to deliver quality to clients. The development of internal policies, personal relationships and trust can lead to more satisfied clients, resulting in loyalty and word-of-mouth recommendations. These are novel results within the literature and can guide accounting firms toward better performance.

Originality/value

This study is justified by the fact that accounting firms must adapt to the new environment and the new requirements of the accounting field and look for solutions that follow the progress of financial and managerial accounting, primarily with regard to service quality, satisfaction, loyalty and word-of-mouth recommendations. We also introduce a new scale to reveal novelties which cannot be observed using traditional service quality scales. This is another important contribution to the quality of accounting services.

Details

International Journal of Quality and Service Sciences, vol. 14 no. 4
Type: Research Article
ISSN: 1756-669X

Keywords

Article
Publication date: 5 February 2021

Babajide Oyewo

This study investigates the usage of modern management accounting techniques popularly referred to as “strategic management accounting” (SMA), and the extent to which…

Abstract

Purpose

This study investigates the usage of modern management accounting techniques popularly referred to as “strategic management accounting” (SMA), and the extent to which innovation attributes (namely relative advantage, compatibility, complexity, trialability and observability) determine SMA usage intensity.

Design/methodology/approach

Survey data was obtained through a structured questionnaire from 45 out of 56 publicly listed manufacturing companies on the Mainboard of the Nigerian Stock Exchange. Descriptive statistics, one-way ANOVA, exploratory factor analysis, confirmatory factor analysis and structural equation modelling were used to analyse data.

Findings

Whereas the overall usage rate of SMA as an innovation is generally moderate, there is significant difference in SMA usage intensity across industries in the manufacturing sector due to environmental uncertainty. Compatibility emerged as the strongest determinant of SMA usage intensity, implying that commercial enterprises would intensely apply SMA to remain innovative, to continuously improve and to incorporate strategy in accounting practice in a bid to survive competition. SMA will witness extensive usage if it aligns with the competitive strategies of an organisation.

Research limitations/implications

The attributes of innovation measured treat all SMA techniques as one, but did not measure relative advantage, compatibility, complexity, trialability and observability for each of the techniques. Future studies may consider investigating how innovation attributes specifically affect each SMA technique. The dimension of compatibility investigated in the study lean towards the alignment of SMA with competitive strategies. Taking into account the multidimensionality of compatibility as an innovation attribute, future studies may examine how past experience of implementing new ideas, as well as compatibility of SMA with corporate culture and value system, affect the dissemination and diffusion of management accounting innovations.

Practical implications

The paper proposes that although innovation attributes may partly explain SMA usage, coercive factors such as competition and environmental uncertainty may also be responsible for the decision to adopt innovative management accounting practices. The study therefore calls for a critical appraisal of how coercive institutional factors such as competition, regulation and actions of key stakeholders influence the decision of organisations to adopt an innovation.

Originality/value

This paper contributes to knowledge by challenging existing knowledge and presenting evidence that innovation attributes acclaimed to determine the spread of an innovation may be inapplicable in certain settings due to some environmental challenges. The study also contributes to knowledge by developing a composite scale for measuring innovation attributes specifically adapted to management accounting innovation, which can be used in future studies.

Details

Journal of Applied Accounting Research, vol. 22 no. 3
Type: Research Article
ISSN: 0967-5426

Keywords

Article
Publication date: 6 June 2008

Trevor Hopper, Mostafa Jazayeri and Chris Westrup

The paper's aim is to establish how world class manufacturing (WCM) was diffused to some small‐ and medium‐sized enterprises in the NW of England and the network of…

3199

Abstract

Purpose

The paper's aim is to establish how world class manufacturing (WCM) was diffused to some small‐ and medium‐sized enterprises in the NW of England and the network of institutions involved ranging from the state to firms, and to iterate the results with Miller and O'Leary's work on accounting practices and governance.

Design/methodology/approach

This followed an actor network theory approach of “following the actors and actants” using interviews and documentation.

Findings

Three accountabilities (financial, production, and idealised customer) at firm and state levels were linked through agencies like consultants, academics, and employer federations, and quasi‐governmental organisations like training and enterprise councils. New discourses and programmes of governance associated with competitiveness fostered changes in accountability locally and nationally. Competitiveness, WCM, and occasional allies like activity‐based costing lacked stable and consistent definition. They are adopted and circulate because their plasticity helps actors redefine themselves within translation and mediation processes.

Research limitations/implications

Shop floor workers were not directly studied. Hence, observations on resistance and enactment are tentative.

Practical implications

Continual translations within large networks shape new techniques of management and governance.

Originality/value

The paper shows that programmes and discourses of governance over time are reciprocally linked in a constellation of state institutions and firms.

Details

Journal of Accounting & Organizational Change, vol. 4 no. 2
Type: Research Article
ISSN: 1832-5912

Keywords

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