ijcrb.webs.com INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS JANUARY 2014 VOL 5, NO 9

Transcription

1 USING ACTIVITY-BASED COSTING TO MEASURE CUSTOMER PROFITABILITY: CUSTOMER-SPECIFIC SELLING AND MARKETING EXPENSES ANALYSIS "AN APPLICATION STUDY IN AN INDUSTRIAL COMPANY" DR. ABDUL AZIZ A. ABDUL RAHMAN DR. NOUR ALDEEN M. GHAFEER University of Philadelphia, Amman, Jordan Faculty of Administrative & financial sciences Accounting Department Abstract This study aims to determine the costs and profitability for a sample of customers in an industrial company by using activity based costing and compare the results with traditional costing data. We will analyze the Customer-Specific Selling and Marketing Expenses to achieve this purpose by determining the customer's costs, then to determine customer's profitability. To arrive at a reined measure of customer profitability, the researchers go to assign costs of four big customers by using philosophy of activity based costing in allocating overhead costs for the company's data of The results show that six variables, i.e. the product handling, order taking, delivery vehicles, rush deliveries, Annual tourist program for customers, and visits to customers influences on the profitability contributed by customers. Keywords: Customer profitability, Customer-specific Selling and marketing expenses, activity based costing, customer-level operating costs. Introduction: Most companies still use traditional methods to allocate overhead costs to products, services, channels, and customers. These companies use often one allocation base to allocate the plant-wide indirect costs by using machine hours, number of employees, direct labor hours as allocation bases to that cost objects. Furthermore, other companies also go to deduct many types of nonmanufacturing indirect costs from operating income such as, delivering finished goods to customers, advertising, order taking, visiting customers, and so on, which are very important to measure customer profitability. Activity based costing system helps companies to categorize costs related to customers into different cost pools on the basis of different types of cost drivers, or cost-allocation bases, which assist to determine costs related to each customer, and then will lead to compute the profitability for each customer also. The importance of the study: The importance of this study emerges from the fact that most of companies still use traditional methods to allocate overhead costs to customers which will lead to distort the customers profitability, and then to complicate distinguishing between profitable customers and unprofitable customers. COPY RIGHT 2014 Institute of Interdisciplinary Business Research 162

2 Analyzing Customer-Specific Selling and Marketing Expenses by using activity based costing system, the company can improve its profitability by determine the unprofitable customers, then try to eliminate them. The objectives of the study: The researcher aims at fulfilling the following goals: 1. Determine the profitability for some customers by using activity based costing system and traditional costing system. 2. Obtain a broad overview about the factors which effect with customersprofitability. 3. Make procedures assist to determine profitable customers and focusing them, and determine losable customers and work to improve its profitability. The problem of the study: From the previous points, the problem of the study can be summed up as follows: 1. Is there a difference between the cost of each customer by using the two systems; activity based costing and traditional costing system? 2. Is there a difference between the profitability of each customer by using the two systems; activity based costing and traditional costing system? The study hypotheses: The researcher tries to test if these hypotheses are correct: H1: There is a significant difference between cost of different customers in ABC system and that of traditional system in the company under study. H2: There is a significant difference between profitability of different customers in ABC system and that of traditional system in the company under study. The methodology of the study: The researchers have adopted the descriptive application methodology because it suits the objectives of this study. The researchers have also depended on information resources relating to the study and have analyzed it. Previous studies: 1. Zohreh Hajiha, Samad Safari Alishah (2011) The purpose of this paper is examination of implementation feasibility of time-driven activity-based costing system (TDABC) in hospitality industry and analyzes profitability of various costumer groups by this system in Iranian context. The results of this system were compared with those of traditional costing system in an Iranian large hotel named Parsian Hotel (as a case study). Regarding to the goal of the subject, this is an application research by case study. The results showed that using TDABC model, in comparison with the existing traditional system in Parsian Hotel, provides more proper data on cost and profitability of customers. Also, the proposed model distinguishes non-added value activities and demonstrates real capacity of each parts of the hotel. Therefore, managers of service companies, especially in hospitality industry, can calculate necessary time for activities by time equations in TDABC. Thus they can do necessary actions to decrease this time and increase hotels profitability. COPY RIGHT 2014 Institute of Interdisciplinary Business Research 163

3 2. Mullika Jumpapang, Phapruke Ussahawanitchakit (2012) The objective of this study is to examine the relationships among three dimensions of marketing learning orientation, marketing practice competency, service innovation, customer value creation, and marketing profitability through a moderating role of marketing experience. Marketing learning orientation consists of customer learning focus, competitive learning capability, and marketing knowledge diversity. In this study, 294 hotel businesses in Thailand were chosen as the sample of the study. The results indicate that three dimensions of marketing learning orientation have a significant positive association with marketing practice competency. Customer learning focus has a significant positive impact on customer value creation, while marketing knowledge diversity has a significant positive impact on service innovation. In addition, it reveals that marketing practice competency has a significant positive effect on service innovation and customer value creation. Furthermore, service innovation can increase marketing profitability directly and indirectly through customer value creation. The moderating role of marketing experience among the relationships of three dimensions of marketing learning orientation, marketing practice competency, service innovation, and customer value creation are found not significant. Additionally, the potential discussion with the results is implemented in the study. Theoretical and managerial contributions are presented. The future study needs to search for mediating variables and moderating variables and includes them in the conceptual model in order to increase the contributions and benefits of the study. Likewise, it needs to collect data from different groups of sample and/or comparative population or from other business sectors in Thailand or elsewhere. 3. Morten Holm & V. Kumar & Carsten Rohde (2012) Customer profitability measurement is an important element in customer relationship management and a lever for enhanced marketing accountability. Two distinct measurement approaches have emerged in the marketing literature: Customer Lifetime Value (CLV) and Customer Profitability Analysis (CPA). Myriad models have been demonstrated within these two approaches across industries. However, limited efforts have been made to explain when sophisticated CLV or CPA models will be most useful. This paper explores the advantages and limitations of sophisticated CLV and CPA models and proposes that the degree of sophistication deployed when implementing customer profitability measurement models is determined by the type of complexity encountered in firms customer environments. This gives rise to a contingency framework for customer profitability measurement model selection and five research propositions. Additionally, the framework provides design and implementation guidance for managers seeking to implement customer profitability measurement models for resource allocation purposes. 4. Raj Devasagayam, Nicholas R. Stark, and Laura S. Valestin (2013) Past literature has suggested maximizing customer satisfaction as a strategic choice to increase customer loyalty and ensuring revenues. However, the relationship between increase customer satisfaction and resultant revenue has remained unexamined. This research focuses on optimizing customer satisfaction rather than maximizing it. This optimization of customer satisfaction is based on maximizing profitability. In aiming for higher customer satisfaction levels with no regard to profitability, a company runs COPY RIGHT 2014 Institute of Interdisciplinary Business Research 164

4 the risk of self-annihilation. Based on conceptual foundations of prior research on Return on Quality (ROQ), we propose the construct of Return on Satisfaction (ROS). We review frameworks of customer satisfaction examined by scholars in marketing and then propose a conceptual ROS model. We use empirical data (n=1597) obtained from an institution of higher education to test the conceptual model we propose. Results indicate that the data demonstrates construct validity and points to promising directions for further research. We conclude by underscoring managerial implications as well as the scholarly contributions of this research. Methods and data: We have access to revenue, cost, and marketing and selling expense data for four big customers of DAWOUD Company, a firm in the Compounds feed industry, used Activity-Based Costing (ABC) in assessing the profitability picture in order to better understand which customers were profitable and which were subsidized. Then we will answer the two these questions: 1. What is the impact of customer-specific marketing and selling expenses on customer costs? 2. What is the impact of customer-specific marketing and selling expenses on customer profitability? To answer these two questions, the researchers try to analyze revenues for each customer, then the costs for each customer by using the four steps in developing an ABC system which prepared by (R. S. Kaplan and R. Cooper, 1998): - Develop the activity dictionary. - Determine how much the organization is spending on each of its activities. - Identify the organization's products, services, and customers. - Select activity cost drivers that link activity costs to the organization's products, services, and customers. Customer-Revenue Analysis: Before we going to determine the amount of revenues for each of our four customers, we have to refer that the company sells variety volume of its vegetable oils, 8 liters, 16 liters, and 200 liters. The researchers have access to the following information relating to revenues for the four customers with prices for each category of items sold to these customers and also to discount of quantity. The results are displayed in the following tables for DAWOUD Company for the year of 2013: COPY RIGHT 2014 Institute of Interdisciplinary Business Research 165

5 The analysis of customer-revenue: Table No. 1: Customer-revenues for four big customers. Customer No Category Quantity Quantity Discount Net Quantity Selling Price Per Unit Amount 8 liters % $12 $ liters % $23 $ liters 215 5% $275 $ Total Revenues $ Customer No Category Quantity Quantity Discount Net Quantity Selling Price Per Unit Amount 8 liters % $12 $ liters % 3363 $23 $ liters 143 5% $275 $ Total Revenues $ Customer No Category Quantity Quantity Discount Net Quantity Selling Price Per Unit Amount 8 liters % $12 $ liters % $23 $ liters 137 5% $275 $ Total Revenues $ Customer No Category Quantity Quantity Discount Net Quantity Selling Price Per Unit Amount 8 liters % $12 $ liters % $23 $ liters 129 5% $275 $ Total Revenues $ The results stated in the table clearly indicate that the total revenues for the four customers are $800,491.75, and there are two variables explain revenue differences across these four customers: (1) the quantity they purchased and (2) the magnitude of the quantity discounting. COPY RIGHT 2014 Institute of Interdisciplinary Business Research 166

6 Tracking quantity discount by customer helps improve customer profitability, because it promote customers to buy in big quantity to get more quantity discounts. The following diagram summarizes the revenue for each customer in dollars: Figure 1- Customer-Revenue REVENUES CUS. N. 21 CUS. N. 49 CUS. N. 53 CUS. N. 60 Customer-Cost Analysis: Customer cost information is essential for managerial decision making (Dalci et al,. 2010). Understanding the true costs of serving specific customers is important for every organization. Those companies who understand which customers are more profitable and which are not are armed with valuable information needed to make successful managerial decision to improve overall organizational profitability (van Raaij, 2003; Dalci et al, 2010). In the changing technological environment, when the internet and e-commerce gains the customers on their side, companies realized that traditional cost accounting systems do not provide accurate cost information, information used in the decision making process. As an answer to these changes, activity based costing (ABC) was designed and, in time, gained popularity, because it focuses on the activities associated with the costs and assigns activity costs to products, services or customers that consume resources. Because of these characteristics ABC (1) becomes a tool for determining true costs of bots sales, marketing activities and customers; (2) will help companies to make better decisions based on accurate costing information (Stapleton et al, 2004; van Raaij, 2005; Cugini et al, 2007; Dalci et al, 2010). The mechanism of ABC requires going through several stages. First, ABC assumes that products, services or customers generate activities and activities consume resources. Second, product costing involves a two-step allocation process in which costs are first allocated to activities and then the activity costs are allocated to products or customers based on each product or customers demand for, or consumption of the activities (Stapleton et al, 2004). While traditional cost systems rely on arbitrary allocation of overhead costs, ABC classifies cost pools according to the activities performed within the organization. Moreover, by understanding the hierarchical levels of the costs ABC enables managers to better understand cost causation and make better decision, it help managers to understand which customers are profitable and which ones are not and leads to increased profitability (Dalci et al, 2010; Horngren, et al, 2012). By reviewing the data for the company under study, The researchers could determine six cost pools (activities) related to customers, costs of each activity, and cost drivers for each activity also, with own total levels at the level of the company under study. The researchers also could determine information on the quantity of cost drivers used by each of four customers. The following tables summarize the results: COPY RIGHT 2014 Institute of Interdisciplinary Business Research 167

7 Table No. 2: Activity information at the level of the company. Activity Area Activity Cost Cost Driver Activity Level Cost Driver Rate Product handling $ Weight of units Sold $0.11 Order taking $40000 Purchase Order 530 $75.47 Delivery vehicles $ Delivery mile traveled $1.79 Rush deliveries $26000 Expedited delivery 94 $ Visits to customers $36000 Sales visit 500 $72 Annual tourist program $38000 Number of customers covered by the program 19 $2000 Total costs of activities $ Information on the quantity of cost drivers used by each of four big customers is as follows: Table No. 3: Cost driver information for the four big customers. Customer No. 21 Customer No. 49 Customer No. 53 Customer No. 60 Weight of units sold Number of purchase order Number of deliveries Miles traveled per delivery Number of rush deliveries Number of visits to customers Customers covered by the program The following table summarizes information about the customer-level operating costs, which are as follows: Table No. 4: Customer-level operating costs. CUSTOMER No. 21 No. 49 No. 53 No. 60 Product handling $O ; ; ; $ $ $ $ Order taking $ ; 30; 55; 50 $ $ $ $ Delivery vehicles $1.79 (40 100); (50 70); (140 50); (220 30) $7160 $6265 $12530 $11814 Rush deliveries $ ; 6; 9; 13 $ $ $ $ Visits to customers $72 12; 7; 17; 22 $864 $504 $1224 $1584 Annual tourist program $2000 each $2000 $2000 $2000 $2000 Total customer-level operating costs $ $27921 $ $ The company under study has 47 customers. So, for decision making purposes, it allocates all customer-level operating costs to all customers equally. This traditional method in allocating these types of costs to customers leads to distort customer-level costs, then to distort customer-level operating income (Horngren, 2012). To calculate the share of each customer from all customer-level operating costs by using traditional method applied in the company, the result will be $18575 ($873000/47 customers (Agents). The following diagram summarizes the customerlevel operating costs for each customer by using activity based costing system and traditional costing system in dollars: COPY RIGHT 2014 Institute of Interdisciplinary Business Research 168

8 Figure 2- Customer-level operating costs (ABC Traditional) ABC Traditional This diagram shows clearly the fundamental differences between the customer-level operating costs calculated by using activity based costing system, and customer-level operating costs calculated by using traditional costing system. Customer-profitability: Many specialists (Kaplan&Atkinson, 1998; Albu&Albu, 2005; Murphy et al, 2005) argue that ABC permits a customer profitability analysis by comparing the revenue streams with the service costs associated with specific customers or customer groups. An analysis of customer differences in revenues and costs can provide insight into why differences exist in the operating income earned from different customers. Managers use this information to ensure that customers making large contribution to the operating income of a company receive a high level of attention from the company. Before we go to compute the profitability for each customer, we need at the beginning to compute the cost of goods sold for each customer. Then to deduct the cost of goods sold for each customer from the customer's revenues to get gross margin, then to deduct all customer-level operating costs, and then to arrive to customer-level operating income. The following table summarizes them: COPY RIGHT 2014 Institute of Interdisciplinary Business Research 169

9 Table No. 5: Cost of Goods Sold for four Big Customers of DAWOUD Company for the year of 2013: Category Cost per unit Quantity Total costs Quantity Total costs Quantity Total costs Quantity Total costs 8 Liters $ $ $ $ $ Liters $ $ $ $ $ Liters $ $ $ $ $27735 Cost of goods sold $ $ $ $ The table shows the cost of goods sold for each customer. The results will use to identify the gross margin for each customer bu using the two systems; activity based costing system and traditional costing system. Cost of goods sold is one element of customer profitability. To determine customer-profitability, the researchers summarize all information needed to this purpose in the following tables: Table No. 6: Customer-Profitability Analysis for four Big Customers of DAWOUD Company for the year of 2013 by using (ABC): CUSTOMER 21 % 49 % 53 % 60 % Total % Revenues $ % $ % $ % $ % $ % -Cost of goods sold $ % $ % $ % $ % $ % Gross margin $ % $ % $ % $ % $ % -Customer-level operating costs $ % $ % $ % $ % $ % -Customer-level operating income $ % $ % $( ) -4.6% $( ) -5.5% $( ) -1.5% The table shows that the profitability of customers by using activity based costing system. The results suggest that the customer number 21 and the customer number 49 achieve profits for the company, as the customer number 21 has achieved profits of $ a gain of 1.8% of its total revenues, while the customer number 49 has achieved profits of a gain of 0.8% of its total revenues. As for customers number 53 and 60, they achieve losses for the company, to the customer number 53 at $ and to the customer number 60at $ , with gain of 4.6% loss of the total revenue for the customer number 53, and 5.5% loss of the total revenue for the customer number 60. Activity based costing can allocate the customer-level operating costs to customers in a feasible way, which is reflected in the measurement of the cost customer's costs in correct way, enabling the company to better determine profitability for the customers. COPY RIGHT 2014 Institute of Interdisciplinary Business Research 170

10 Table No. 7: Customer-Profitability Analysis for four Big Customers of DAWOUD Company for the year of 2013 by using (Traditional): CUSTOMER 21 % 49 % 53 % 60 % Total % Revenues $ % $ % $ % $ % $ % -Cost of goods sold $ % $ % $ % $ % $ % Gross margin $ % $ % $ % $ % $ % -Customer-level operating costs $ % $ % $ % $ % $ % -Customer-level operating income $ % $ % $ % $ % $ % The table shows that all customers may achieve profits by using traditional costing system. And the reason for these results is due to the inability of the company to determine the costs of each customer accurately. Which makes the company is unable to distinguish between the winners from the losers customers. COPY RIGHT 2014 Institute of Interdisciplinary Business Research 171

11 Figure 3- Customer-Profitability (ABC Traditional) ABC Traditional This diagram shows an overview of the profitability of the customers by using the two systems; activity bases costing system, and traditional costing system, which helps management in decision making on the selection of the best system, and then identify customers who must be eliminate them or work to improve the profitability for them through decrease the service-costs for the customers, as well as customers who must be cared for. Managers use the customer-profitability analysis to identify the small set of customers who deserve the highest service and priority. They also identify ways to make less-profitable customers more profitable. 4- Hypotheses Test: H1: There is a significant difference between cost of different customers in ABC system and that of traditional system in the company under study. H2: There is a significant difference between profitability of different customers in ABC system and that of traditional system in the company under study. Test of the first hypothesis The first null hypothesis states that "There is no significant difference between cost of different customers in ABC system and that of traditional system in the company under study." Table No.8: the results of customer-costs analysis for the first hypothesis. 21 CUSTOMER Percentage of customer-level operating costs to revenues by using (ABC) 13.7% 14.7% 20.1% 21% Percentage of customer-level operating costs to revenues by using (Traditional) 7.5% 9.7% 10% 10.6% The difference between two percentages 6.2% 5% 10.1% 9.4% The table shows that two customers; customer No. 53 and customer No. 60, have more difference between their operating costs by using the two systems (ABC and Traditional). 10.1% for the customer No. 53. This means that (10.1% $ revenues) $18599 is a difference in the customer-level operating costs for the customer No. 53 between the two systems; activity based costing system and traditional costing system. And for customer No. COPY RIGHT 2014 Institute of Interdisciplinary Business Research 172

12 60, the difference is 9.4%. This means that (9.4% $ revenues) $16466 is a difference in the customer-level operating costs for the customer No. 60 between the two systems; activity based costing system and traditional costing system. These differences are a significant proportion and prove the first hypothesis of this search, which states "There is a significant difference between cost of different customers in ABC system and that of traditional system in the company under study". Test of the second hypothesis The second null hypothesis states that "There is no significant difference between profitability of different customers in ABC system and that of traditional system in the company under study." Table No.9: the results of customer-profitability analysis for the second hypothesis. CUSTOMER Percentage of customer-profitability to 1.8% 0.8% -4.6% -5.5% revenues by using (ABC) Percentage of customer-profitability to 8% 5.8% 5.5% 4.9% revenues by using (Traditional) The difference between two percentages -6.2% -5% -10.1% -10.4% The table shows that two customers; customer No. 53 and customer No. 60, have more difference between their profitability by using the two systems (ABC and Traditional). 10.4% for the customer No. 60. This means that (10.4% $ revenues) $18218 is a difference in the customer-level profitability for the customer No. 60 between the two systems; activity based costing system and traditional costing system. And for customer No. 53, the difference is 10.1%. This means that (10.1% $ revenues) $18599 is a difference in the customer-level profitability for the customer No. 60 between the two systems; activity based costing system and traditional costing system. These differences are a significant proportion and prove the second hypothesis of this search, which states ": There is a significant difference between profitability of different customers in ABC system and that of traditional system in the company under study ". Results: The following points represent the results: 1. There is a fundamental difference between the customer-level operating costs according to the activity based costing system and the customer-level operating costs according to traditional costing system 2. There is a fundamental difference between the customer-profitability according to the activity based costing system and the customer-profitability according to traditional costing system 3. The results show that the customer-level operating costs have a significant effect on the customer-costs. 4. The results show that the customer-level operating costs have a significant effect on the customer-profitability. COPY RIGHT 2014 Institute of Interdisciplinary Business Research 173

13 Recommendations: The following points can be considered as real recommendations in this field: 1. Need to work on the allocation of the costs of customer service to customers in a reasonable manner. 2. Need to work on the application of the activity based costing system, because it provides a better mechanism for the allocation of customer-level operating costs. 3. The need to reconsider the customer-level operating costs, because it will impact on the customer- profitability. COPY RIGHT 2014 Institute of Interdisciplinary Business Research 174

14 References: Books 1. Allseed, Ismail M. Strategic Management. Aljameiah Aldar for publishing, Egypt, Atkinson, K. ; Matsumura, Y. Management Accounting. International Edition, Prentice Hall, Atkinson, K., Advanced Management Accounting. International Edition, Prentice Hall, Horngren, C. T. ; and others, cost Accounting., 14 th Edition, Pearson, Zahirul H. Strategic Management Accounting. 2 nd Edition, Prentice Hall, Researches: 1. Bih-Ru L. (2007) Management accounting in ERP integrated MRP and TOC environments, Industrial Management & Data Systems, Vol. 107, No Chen I.J., Popovich K. (2003) Understanding customer relationship management (CRM). People, process and technology, Business Process Management Journal, Vol. 9, No Cugini A., Caru A., Zerbini F. (2007) The cost of customer satisfaction: a framework for strategic cost management in service industries, European Accounting Review, Vol. 16, No Dalci I., Tanis V., Kosan L. (2009) Customer profitability analysis with Time-Driven Activity-Based Costing: a case study in a Hotel, accepted paper Emerald Group Publishing Limited; 5. Helgesen O. (2007) Customer accounting and customer profitability analysis for the order handling industry A managerial accounting approach, Industrial Marketing Management, No Kazunori Itō, Mohsen Souissi, "managerial accounting as a tool for corporate strategy: synergy creation and anergy inhibition", Journal of International Business Research, Volume 11, Number Lambert D. (2010) Customer relationship management as a business process, Journal of Business & Industrial Marketing, Vol. 25, No Lobo M. X. ; Tilt C. ; Forsaith D., "The Future of Management Accounting: A South Australian Perspective". Journal of Applied Management Accounting Research, Morten Holm & V. Kumar & Carsten Rohde, "Measuring customer profitability in complex environments: an interdisciplinary contingency framework", Journal of the Academy of Marketing Science (2012). 10. Mullika Jumpapang, Phapruke Ussahawanitchakit, "marketing learning orientation, service innovation, customer value creation and marketing profitability: Empirical study of hotel businesses in Thailand". International journal of business research, Volume 12, Number 4, Murphy J.J., Burton J., Gleaves R., Kitshoff J. (2005) Converting Customer Value: From Retention to Profit, Barnes & Noble; 12. Ngai E.W.T. (2005) Customer relationship management research ( ) An academic literature review and classification, Marketing Intelligence & Planning, Vol. 23, No. 6. COPY RIGHT 2014 Institute of Interdisciplinary Business Research 175

15 13. Ngai E.W.T., Xiu L., Chau D.C.K. (2009) Application of data mining techniques in customer relationship management: a literature review and classification, Expert Systems with Applications, No Raj Devasagayam, Nicholas R. Stark, and Laura S. Valestin, " Examining the Linearity of Customer Satisfaction: Return on Satisfaction as an Alternative", journal of Business Perspectives and Research, January-June, Sharkar M. Z. H. ; Obhan, M. A. S. ; Sultana, S., "Management Accounting Development and Practices in Bangladesh", BRAC University Journal, vol. III, no.2, Shebab E.M., Sharp M.W., Supramanian L., Spedding T.A. (2004) Enterprise resource planning. An integrative review, Business Process Management Journal, Vol. 10, No Sin L., Tse A., Yim F. (2005) CRM: conceptualization and scale development, European Journal of Marketing, Vol. 39, No. 11/ Sliman S. Alsoboa, Jehad Saleh Aldehayyat, "The Impact of Competitive Business Strategies on Managerial Accounting Techniques: A Study of Jordanian Public Industrial Companies", International Journal of Management Vol. 30 No. 2 Part 1 June Stapleton D., Pati S., Beach E., Julmanichoti P. (2004) Activity based costing for logistics and marketing, Business Process Management Journal, Vol. 10, No Tuan Z. T. M. ; Malcolm S. ; Hadrian D., "Management Accounting and Organizational Change: An Exploratory Study in Malaysian Manufacturing Firms". Journal of Applied Management Accounting Research, Vol.8.No.2, Van Raaij E.M. (2005) The strategic value of customer profitability analysis, Marketing Intelligence & Planning, Vol. 23, No Zohreh Hajiha and Samad S. Alishah, " implementation of time-driven activity-based costing system and customer profitability analysis in the hospitality industry : evidence from Iran". Economics and Finance Review Vol. 1(8) pp , October, COPY RIGHT 2014 Institute of Interdisciplinary Business Research 176