The Joint Effect of Competition and Complexity on Customer Accounting System Design

Morten Holm, Christian Ax

Research output: Contribution to conferencePaperResearch


The importance of measuring customer profitability has recently been reiterated by the management accounting community. However, the stream of research on the factors influencing customer accounting (CA) design choices is still scarce and inconclusive. This paper addresses how the level of complexity and competition firms face influences the degree of Customer Profitability Analysis (CPA) Model sophistication. Applying a path analysis on survey data from 217 firms reveals support for three hypotheses: (i) There is an inverted u-shaped relationship between competition intensity and customer service complexity; (ii) There is a direct positive relationship between customer service complexity and CPA model sophistication; (iii) This positive association is stronger when competition is non-price based than when competition is price based. The study hereby contributes to research on CA design in particular as well as the general research stream on environmental factors’ influence on the sophistication and use of management accounting systems across firms.
Original languageEnglish
Publication date2014
Publication statusPublished - 2014
Event11th Annual Conference for Management Accounting Research 2014 - WHU - Otto Beisheim School of Management, Vallendar, Germany
Duration: 13 Mar 201414 Mar 2014
Conference number: 11


Conference11th Annual Conference for Management Accounting Research 2014
LocationWHU - Otto Beisheim School of Management
Internet address

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