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Paper Information

Journal:   JOURNAL OF ACCOUNTING ADVANCES (JAA) (JOURNAL OF SOCIAL SCIENCES AND HUMANITIES)   FALL 2009 , Volume 1 , Number 1 (57/3); Page(s) 29 To 44.
 
Paper: 

A SURVEY OF THE ATTITUDE OF IRANIAN BANK MANAGERS TOWARD THE CUSTOMER PROFITABILITY ANALYSIS

 
 
Author(s):  AGHAEI M.A., MOLA AHMAD SALIM
 
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Abstract: 
Introduction: This paper discusses the current position of Customer Profitability Analysis System (CPAS) in Iranian Banks and the attitude of Iranian bank managers about CPAS.
Nowadays, focusing on customers in organizations leads to strategy. Therefore, it is important to have information about customers. This information includes customer profitability, that management accountants measure it with customer profitability analysis system. As the private sector has developed, competition in bank industry has become more serious. In order to increase the competition power, the banks should develop their strategies based on customers. Accounting, also should match itself with these strategies by focusing on customers.
One of the most important roles of accounting in relation to collecting information is customer profitability analysis. Having information about current position of customer profitability analysis system in Iranian private banks and management attitude toward this system is a first step for applying information technology in banks.
Research hypothesis: This article attempts to study the current position of CPAS in Iran’s private banks. Customer profitability is the difference between revenues from customer and their costs. Customer profitability can accurately be measured using Activity Based Costing (ABC), which uses the concept of revenue and cost drivers ABC. In CPAS, the cost subject is "Customer".
There are five main hypotheses in this study:
1- Customer Profitability Analysis System in Iranian banks is undeveloped.
2- The attitude of Iranian bank managers toward the necessity of practicing Customer Profitability Analysis System is positive.
3- Iranian bank managers believe that the information from Customer Profitability Analysis System affects managers decisions.
4- Iranian bank managers prefer LCPAM method of Customer Profitability Measurement for their Banks.
5- Iranian bank managers believe that practicing Customer Profitability Analysis System is possible.
Methods: This article is a survey research. The instruments for data collection in survey research are interview and questionnaire. We used questionnaires in this study to collect the needed data. We sent 140 questioners to managers of four private banks. These banks are “Eghtesad Novin”, “Parsian”, “Saman” and “Karafarin”. From these 140 questioners, 92 questioners were used for hypothesis testing. The validity and reliability of the questioners were tested by receiving the expert’s opinion. We analyzed the information from the questionnaires based on descriptive and inferential statistics. The chi- square and population proportion tests were used to evaluate the results of investigating the Iranians manager’s attitude toward customer profitability analysis. The current position of CPAS is determined by census. The hypotheses related were tested by different statistical methods. To test Hypothesis 1 "descriptive" research method is used. To test Hypothesis 2 and 3 "survey" research method is used and the sampling method is random stratified sampling.
To test Hypothesis 2 and 3 Chi-square and to test Hypothesis 4 and 5 population proportion test is used.
Results: This paper reviews the current position of Customer Profitability Analysis System (CPAS) in Iranian Banks and the attitude of Iranian bank managers about CPAS.
The results illustrate that CPAS in Iranian banks is undeveloped and the attitude of Iranian bank managers toward the necessity of practicing CPAS is positive. They believe that the information from CPAS affects managers’ decisions about loans payment, interest rate of loans, relationship with customer, pricing and marketing strategies. While Iranian bank managers don't prefer any method of Customer Profitability Measurement, they believe that practicing CPAS is possible.
Discussion and conclusion: As mentioned, the purpose of this paper is investigating the Customer Profitability Analysis System in Iran’s private banks. The results show the lack of the systems that measure the profitability of the customers and the positive attitude of Iranians bank managers toward CPAS. To establish this system, bank accounting systems need fundamental changes. In other words, the pre requisite of CPAS is activity based costing. In this situation we have the opportunity to calculate the customers cost.
Estimating customer’s standard cost, calculating fellow-up cost in the case of customer’s failure and distinguishing cost based on the customers are the important subjects in this area that is missed among the information prepared in the present bank system. Bank managers believe that this information has a great impact on their decisions such as pricing and marketing strategies, eliminating a customer or making a deals with new customers.
The reasons for undeveloped Customer Profitability Analysis System in Iran’s private banks, is an important area which is not mentioned in this paper. Working on this subject is recommended for future researches. In addition, researchers can formulate an optimal model for private banks or bank industry as a whole. To achieve this goal, studying the current accounting systems and determining the ways of improving them can be considered as an appropriate starting point.
 
Keyword(s): CUSTOMER PROFITABILITY ANALYSIS SYSTEM, ACTIVITY-BASED COSTING, BANK, ATTITUDE OF IRANIAN PRIVATE BANK’S MANAGERS
 
 
References: 
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Click to Cite.
APA: Copy

AGHAEI, M., & MOLA AHMAD, S. (2009). A SURVEY OF THE ATTITUDE OF IRANIAN BANK MANAGERS TOWARD THE CUSTOMER PROFITABILITY ANALYSIS. JOURNAL OF ACCOUNTING ADVANCES (JAA) (JOURNAL OF SOCIAL SCIENCES AND HUMANITIES), 1(1 (57/3)), 29-44. https://www.sid.ir/en/journal/ViewPaper.aspx?id=189444



Vancouver: Copy

AGHAEI M.A., MOLA AHMAD SALIM. A SURVEY OF THE ATTITUDE OF IRANIAN BANK MANAGERS TOWARD THE CUSTOMER PROFITABILITY ANALYSIS. JOURNAL OF ACCOUNTING ADVANCES (JAA) (JOURNAL OF SOCIAL SCIENCES AND HUMANITIES). 2009 [cited 2021May08];1(1 (57/3)):29-44. Available from: https://www.sid.ir/en/journal/ViewPaper.aspx?id=189444



IEEE: Copy

AGHAEI, M., MOLA AHMAD, S., 2009. A SURVEY OF THE ATTITUDE OF IRANIAN BANK MANAGERS TOWARD THE CUSTOMER PROFITABILITY ANALYSIS. JOURNAL OF ACCOUNTING ADVANCES (JAA) (JOURNAL OF SOCIAL SCIENCES AND HUMANITIES), [online] 1(1 (57/3)), pp.29-44. Available: https://www.sid.ir/en/journal/ViewPaper.aspx?id=189444.



 
 
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