The External Orientation of Strategic Management Accounting: Customer Accounting, Business Strategies, and Customer Performance

Abstract

This study is added to the limited empirical studies concerning the practices of customer accounting (CA). The aims of this study were to explore the extent of usage of CA techniques in Jordanian industrial companies (JIC), to investigate the status of customer performance in JIC, to examine the influence of business strategies on the usage of CA, and to examine the influence of CA on customer performance in JIC. In addition, this study aims to determine the relationship between business strategies (cost leadership, differentiation and focus) and customer performance control for CA. A survey on Jordanian industrial companies (JIC) was conducted for data collection. A total of 90 questionnaires were distributed to these companies. Out of this number 68 were returned. The response rate was about 75.5%. Descriptive statistics showed that the customer performance' indicators in JIC are in a good status and there are good improvements in all categories of customer performance. One-sample t-test showed that CA techniques were used by the JIC. The results of multiple regressions showed that business strategies contribute significantly and show high levels of variation of CA in JIC. Cost leadership strategy and focus strategy had a statistically significant positive effect on CA in JIC. The results of simple regressions showed that that CA contributes significantly and explains a quarter of the variation in customer performance in JIC. It is also found that CA has a statistically significant positive effect on customer performance in JIC. A partial correlation revealed that there were moderate, positive partial correlations between business strategies and customer performance whilst controlling for CA. in addition, ZPC showed that there were statistically significant, moderate, positive correlations between these strategies and customer performance, indicating that CA have an important influence in controlling for the relationship between business strategies and customer performance. The positive signs of the r values are indication that when CA is enhanced, business strategies (cost leadership, differentiation and focus) and customer Performance are also enhanced. This study made an important contribution because it is first of its kind that addresses these relationships. This study suggested that customer performance should be considered as an important part of the future performance measurement and management systems in JIC. In context of cost-benefit approach, this study recommends JIC to continue adopting all of CA techniques in the future.

Keywords: strategic management accounting, customer accounting, business strategies, customer performance, Jordan.