Extent of the Target Cost Application in Commercial Banks in Aqaba Special Economic Zone

Dr. Farouq Al Azzam

Abstract


This study investigates the method of target cost and the difficulties that commercial banks face in Aqaba Special Economic Zone. The study depends on a questionnaire to collect the primary data and analyze them statistically to come out with the results. The results show that banks in ASEZ do analyze the customers' needs and market with some concentration on service design but the banks lack to the strategy of team work. The sub-constituents were compatible with the dimensions that they are related to with some exceptions in which services price is not determined by the customers' capability. In addition, there are no continuous studies which identify competitors' new services. Furthermore, the number of employees involved in determining the appropriate form of service is not sufficient. The study revealed that there are no obstacles which hinder application of this approach except the internal organizational clash of departments target and the management doesn't take into consideration the employees' suggestions in the following modern ways in cost management.

The study recommended that banks in ASEZ should consider the customers' abilities in determining services price and conduct continuous studies to identify competitor's new services. In addition, the banks should embrace enough number of employees to determine the appropriate form of service to act in the spirit of teamwork. The management should make use of employees' opinions and experiences and aware the employees of their important role in taking decisions in cost reduction. The management should also lessen the internal organizational conflicts resulting from department objectives clashes through cooperation in tasks execution. The management should consider the employees' suggestion in pursuing and applying modern approaches which help in cost management.


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DOI: http://dx.doi.org/10.5296/jmr.v5i1.2919

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