Creating customer value through the logistics process: an empirical investigation of marketing and management accounting integration

Abstract

Customer value creation is becoming an important area where organisations can create a sustainable competitive advantage. Logistics is the interface between the market place and the organisation wishing to satisfy its customers and is thus a key area for creating value for the customer. Logistics is a process that crosses functional boundaries meaning that functional integration is the key in the smooth flow of goods and related information. The objective of this research is to improve the understanding of how functional integration contributes to customer value creation in the logistics arena. Both marketing and management accounting can contribute to logistics' ability to create value for the customer. Both functions have recognised that all parts of the organisation need to be involved in creating customer value and this research investigates how market orientation and strategic accounting orientation contribute to functional integration as well as to customer value creation. Using the literature as a base, the "Functional Integration and Customer Value Creation Model" was developed and 31 hypotheses were investigated. This model is tested in 386 New Zealand organisations. Path analysis was employed in order to identify the best fitting model to the data.

This research reveals that the three components of market orientation and the two components of strategic accounting orientation can all contribute in some way to functional integration as well as to customer value creation. However, in contrast to what has been conceptually argued in the literature, no support was found for the relationship between functional integration and customer value creation in logistics indicating a strong need for future research.

This research makes several significant contributions to the literature. Firstly, it brings together the marketing, management accounting, and logistics disciplines and identifies the different roles of both marketing and management accounting in functional integration and customer value creation in logistics respectively. Secondly, a functional integration and customer value creation model was developed and tested in an empirical setting, providing a base for future researchers. Lastly, this research provides the business community with some ideas regarding which areas to focus on in order to create value for their customers.