Customer accounting information usage and organizational performance

Abstract

Over the last two decades, the importance of management accounting systems (MAS) has been highlighted by both academics and practitioners. Many authors (Chenhall and Morris, 1986; Mia and Chenhall, 1994) have argued that MAS provide the managers with vital information to assist them in enhancing the quality of decisions they make, and improving their organizational performance (Downie, 1997; Mia and Patiar, 2001). However, although MAS play a very important role in the organization by providing useful information for decisions maker, it has been criticized since it is historically rather than future oriented, internal rather than external oriented (Drury, 2007; Simons, 1990). Therefore, conventional management accounting practices have filed to meet the requirements of contemporary business environment, as well as, they are not sufficient to maintain organizations' long-term competitiveness (Mia and Patiar, 2001).

Do customer profitability analyses pay? A survey of large Norwegian companies

“…Previous studies provide mixed results regarding the relationship between the extent of use of CPA and business performance; however, three of the four studies addressed above point to a positive association. Similar results have been found when addressing the relationship between the use of accounting information and organisational performance, a relationship that has been subjected to extensive empirical examination (Baines and Langfield-Smith, 2003;Cadez and Guilding, 2008;Al-Mawali et al, 2012). A majority of studies indicate a positive relationship between the use of accounting information and business performance.…”

“…Other studies have analysed the relationships between the extent of use and the usefulness of CPA-methods and some studies (rather few) have addressed the relationship between the extent of use of CPA and business performance. The findings of this study are compared with the findings of four former studies: Malmi et al (2004), Al-Mawali et al (2012), McManus (2013) and Bjørnenak (2013). The contexts of these studies are businesses in Finland, Jordan, Australia and Norway.…”

“…McManus (2013) found no significant relationship between the extent of use of CPA and business performance. Al-Mawali et al (2012) included three CPA-methods in the study: 1 CPA of individual customers 2 CLV analysis 3 customer valuation and found that the extent of use of CPA of individual customers is positively linked to performance, particularly for larger companies (more than 300 employees).…”

Establishing Customer Knowledge Through Customer Accounting in Tourism Industry: A Study of Hotel Sector in Malaysia

“…Generally, the findings from these studies indicate the importance given to room service, hotel restaurant meals, and telephone calls, to generate additional revenue after the initial sale of hotel room accommodation. CA encapsulates four different dimensions of customer information, namely Customer Profitability Analysis (CPA), Lifetime Customer Profitability Analysis (LCPA), Valuation of Customer as Assets (VCA), and Customer Equity Analysis (CEA) (Al-Mawali et al 2012). CPA is the most comprehensive CA dimension with the applications of activity-based costing framework on customers.…”

“…Meanwhile, Noone and Griffin (1999) presented the findings of a case study on developing and implementing a segment's CPA in the Irish hotel. Besides that, studies have proved positive effect and widened the role of LCPA (Cooper & Kaplan 1991;Foster & Gupta 1994;Al-Mawali et al 2012) and customer valuation analysis (Foster et al 1996;McManus 2013) on business knowledge. The stringent competition in hotel markets yet requires the mastery of interest in their customers, and therefore the information about customers may result in gains and profits to the organisation.…”