Int. j. econ. manag. soc. sci., Vol(4), No (1), January, 2015. pp.

58-66

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International Journal of Economy, Management and Social Sciences

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ISSN:
2306-7276

Copyright 2015. All rights reserved for TI Journals.

Studying Effect of Privatization on Application of Management

Accounting Tools and Performance of National Iranian Copper
Industries Company
Reza Dehgan*
M.A of Accounting, Department of Accounting, Kerman Branch, Islamic Azad University, Kerman, Iran.

Ahmad Khodamipour
Associate professor, Shahid Bahonar University of Kerman, Kerman, Iran.

Zinolabedin Sadeghi
Assistant professor, Shahid Bahonar University of Kerman, Kerman, Iran.
*Corresponding author: dehgan@nicico.com

Keywords

Abstract

Privatization
Management accounting tools
Financial performance
National Iranian Copper Industries
Company

One of the ways for achieving economic development is privatization policy, in which governments examine the
possibility of transferring their duties and facilities from public to private sectors. Then, in the case of necessity,
they implement such a transfer. Given the importance of privatization and increased efficiency of companies,
which are among the objectives of privatization policy, this study aimed to examine effects of privatization on
the performance and application of management accounting tools in National Iranian Copper Industries
Company. Senior and middle managers of National Iranian Copper Industries Company (LLP) constituted the
statistical population. This study was conducted in two steps: investigating financial performance and applying
management accounting tools before and after privatization. Research hypotheses were analyzed using paired ttest. The results indicated a significant relationship between operating cash flow and sales growth percentage.
Also, another significant relationship was observed between application of management accounting tools and
privatization. Tools of budgeting, breakeven analysis, profitability analysis of products, and re-engineering had a
significant increase in National Iranian Copper Industries Company after privatization.

1.

Introduction

In the process of privatization and entry of governmental companies in to the capital market, the question is raised that "Does privatization
process really lead companies to the growth path? Privatization means reducing the government's economic activities or limiting governmental
intervention in economic affairs. In another definition, privatization means delegating governmental resources to the private sector [12].
According to the approvals of the Cabinet in1991-1992 and considering Articles 134 and 138 of the Constitution of the Islamic Republic of Iran,
among the objectives of privatization are improving the efficiency of companies, reducing size of governmental under takings in unnecessary
economic activities and services, establishing economic balance, and optimally using national facilities; in other words, "Reducing
responsibilities of the government and getting governmental resources free from the domain of governmental management in order to promote
efficiency and productivity in their application [6]. Considering that the entry of National Iranian Industries Company in to the capital market
has been one of the largest privatizations in Iran, feedback of privatization in basic metals industrial companies, the largest of which was
National Iranian Copper Industries Company, should be investigated to determine whether the government has achieved its goals or not. With
regard to the stated points, this study aimed to examine effects of privatization, performance of National Iranian Copper Industries Company,
and application of management accounting tools after privatization. To evaluate performance of National Iranian Copper Company as one of the
mineral industries in this research, indicators like return on asset, return on equity, operating cash flow, and sales growth percentage of the
company were utilized. Also, to investigate management accounting tools, deviation analysis, breakeven analysis, activity-based costing, and
other management accounting tools were used.

2.

Research literature

Different definitions have been proposed for privatization, some of which are given below:
Privatization can be defined in a broader sense than ownership transfer, management transfer, or delegation of the ownership of
governmental sector to private sector; such a definition would include managerial and lease contracts as well(JhonMoze, 1992).
Conversion or transfer of ownership from public sector to the private one. In this research, changing the administration of
governmental companies to non-governmental sector was considered so that at least 51% of shares of these companies were released
from the governmental [15].
In academic dictionary, the term privatization refers to change of control or ownership from government to private system.
Privatization is an important aspect of economic policies and is defined as the process of transferring ownership of governmental
enterprises to the private sector. Has been defined as a means for improving performance of economic activities via increasing the role

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Studying Effect of Privatization on Application of Management Accounting Tools and Performance of National Iranian Copper Industries Company
International Journal of Economy, Management and Social Sciences Vol(4), No (1), January, 2015.

of market forces in case at least 50% of governmental shares are privatized. Privatization can be also defined in a broader sense than
transfer of ownership, management, or delegation of public sector to private sector, which includes managerial and lease contracts [1].
Management accounting is the process of defining, measuring, accumulating, analyzing, preparing, interpreting, and exchanging information
used by management for planning, evaluating, and controlling a business entity to assure appropriate use and accountability to their resources.
Management accounting also includes preparing financial reports for non-management groups such as beneficiaries, creditors, regulatory
agencies, and tax authorities.
Management accounting is the process of identifying, measuring, accumulating, analyzing, setting, interpreting, and communicating information
(financial and operational) which is used to plan for the assessment and control of organizations and ensure accountability and use of resources
related to managers [6]. In this study, application of management accounting tools such as process re-engineering, budgeting, breakeven
analysis, and profitability analysis of products was studied.
Main objectives of management accounting could be outlined as follows:
Providing information required by managers for planning and decision-making
Helping managers in leading and controlling operational activities
Motivating managers and employees to act along with the objectives of organizations, and
Measuring and evaluating performance of subordinate units, managers, and other employees
Objectives of privatization differ depending on economic characteristics and situation of each country; however, in all countries that have
undertaken privatization, the main objective is to improve economic conditions. In addition to this main objective, other objectives can also exist
which include increase of national production and productivity, access of government to financial resources of private sector, encouraging
competition, increase of national welfare and efficiency of economic activities, saving in governmental costs, making boom in the capital market
and promoting participation culture in the country, preventing evident and hidden monopolies, collecting cash, and establishing a balanced
system of income distribution among different groups of people [7]
As stated by Nellis (1992) about the objectives of privatization, it can have multiple targets according to the characteristics of each country; i.e.
for each country, it can be implemented to fulfill one of its goals. But in general, its economic goals such as preventing use of production
facilities in public sector in order to increase efficiency or production and strengthen capital markets within the free market system, increasing
foreign exchange income, and other targets like democratizing industrial ownership, preventing capital polarization, and preparing the ground for
fulfilling free or liberal economy can be referred to.
According to general policies of Article 44 of the Iranian Constitution, the following objectives can be stated as privatization policies:
Accelerating national economy growth
Expanding public ownership in order to secure social justice
Improving efficiency of economic enterprises and productivity of human, technological, and material resources
Increasing competitiveness in national economy
Reducing financial and managerial burden of the government in terms of undertaking economic activities
Increasing general level of employment
Encouraging people to save and invest and improving households' income
Delegating shares of the government to the public in Iran was first stated in 1974. Although the government had made the best utilization from
the surplus of oil revenues, it established an organization with the aim of delegating shares to people, workers, and farmers; in Third
Development Plan, the government undertook the same task under another title.
Financial Organization of Developing Ownership of Production Units was established in 1975 and aimed to share ownership of production
units among farmers and workers. During later years until the Revolution, this organization awarded shares to at least half of rural population
and a major part of workers in Iran. Islamic Revolution and subsequently the 8-year war along with governmental measures in terms of
nationalizing industries stopped privatization objectives and even transfer of shares to employees of the government itself. During this period,
the number of governmental companies increasingly grew and the country had to incur extra expenses to maintain these companies.
In the early 1989 while the country's economy was in the post war period, privatization was again discussed and some by laws, plans, and bills
were placed on the agenda of the parliament and government. After the approval of Council of Ministers and declaration of 400 companies
which could be delegated, privatization was more strongly continued since 1991. Management organization of the time also accelerated this
trend by presenting two recommendations which were later became known as Clause 32 of First Development Plan along with two approvals by
Council of Ministers in 1991 and 1992.
The result of delegating governmental companies in 1991 until 1994 was selling R 1715.5 billion of shares, which were transferred in three ways
of exchange, auction, and negotiation. Between 1995 and 1997, the government sold R 1780.7 billion shares in these three ways and, between
1998 and 2000, R 4832.3 billion of shares were sold by exchange and auction.
Thus, sum of total delegated shares between 1991 and 2000 amounted to R 8328.7 billion, about 42% and 58% of which were from 1991 to 1997
and from1998 to 2000, respectively.
Prior to Third Development Plan, delegating shares of governmental companies were done according to scattered rules and regulations, the last
of which was Clause 35 of National Annual Budget Laws. In Third Development Plan, privatization programs including the organization of
governmental companies and delegation of their shares in the second and third chapters of the mentioned act were confirmed.
In this law, Council of Ministers and High Commission of Delegation have been defined as policy-making institutes in privatization program
and also Iranian Privatization Organization and Holding Company are the executive agents.
After approving the statute of Iranian Privatization Organization (IPO)by Council of Ministers, this organization was established as a change in
Financial Organization of Developing Ownership of Production Units and assumed the responsibility of the secretariat of High Commission of
Delegation as appointed by Ministry of Economic Affairs and Finance. Then, managing director of this organization was appointed as the
secretary of High Commission of Delegation.
In sum, since early 1991 until the end of 2008, R 401.507 billion of the shares of governmental companies were privatized; 93.04%were between
2006 and 2008 and the renaming between 1991 and 2005.

Reza Dehgan *, Ahmad Khodamipour, Zinolabedin Sadeghi

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International Journal of Economy, Management and Social Sciences Vol(4), No (1), January, 2015.

3.

Research background

In 2010, Zhanghki Huang conducted a study on changes in operational and financial performance of 127 samples of Chinese privatized
companies, the control of which was transferred from public to private sectors. The aim of this study was to extend the current literature in three
aspects: expanding literature of privatization, stating different effects of ownership on privatization, and necessity of further reforms in the
government of China. Thus, performance changes of the mentioned companied was compared in three years before and after privatization. In
order to determine the significance of differences between dependent variables in three years before and after privatization, Wilcoxon test was
used. The main research hypothesis was based on the principle that complete or final privatization was effective for improvement in operational
and financial performance of companies. This study investigated efficiency of companies, profitability, financial leverage, cost saving in
production, and employment. Results showed increase in efficiency and profitability and reduction in the number of human resources. Moreover,
effect of delegating companies' management to local (prior) managers and those out of the set of companies (new managers) were also
examined, which indicated that, despite the tendency of internal management to improved performance of companies, there was not enough
motivation for restructuring. These studies also implied that complete transfer of control from public to private sectors in the delegated
companies was an effective factor for performance improvement of investigated companies [16].
Kerr Jarrod et al. (2008) examined impact of privatization on companies and stock market in New Zealand and Australia. The obtained results
revealed that performance of companies considerably improved after privatization so that privatization increased annual growth rate of
companies by 12% in New Zealand; in Australia, this rate was 9%. Analyses also showed that privatization in New Zealand and Australia had a
determined collaboration in the development of stock market and also liquidity of privatized companies experienced considerable increase,
which demonstrated more activity of investors. Total sum of privatization in New Zealand and Australia increased from $ 16 million in 1991 to
over $ 637 billion in 2001 and from $ 344 billion in 1993 to $ 700,580 billion in 2001, respectively [5].
Oktencagla and Arink, peren (2006) in a study entitled Effects of privatization on performance investigated effect of privatization on
performance of privatized companies in Turkey. They considered impact of privatization on companies from two aspects: First, privatization
could cause changes in companies' objectives (ownership effect) and, second, privatization could lead to changes in the market structure
(peripheral effect). They concluded that ownership effect was enough for improving efficiency of privatized companies [12].
Abolhassani (2010) investigated impact of privatization of governmental companies on their economic value-added (EVA). In this study, data
related to three years before and after privatization of 32 companies which had 50% of their shares delegated from the government to the private
sector were compared during 1998 to 2008. Results showed that privatization had no effect on EVA. In fact, performance and efficiency did not
make big changes and mean of EVA had almost no change before and after privatization [1].
Moshiri (2010) studied effect of privatization and economic growth using empirical endogenous growth model and data from 117 developing
countries from1998-2003 in three short, medium, and long-term modes. He concluded that privatization had a neutral effect oneconomic growth.
Also, results demonstrated that compatibility, continuity of implementing privatization policies, competition environment, and transparency in
policy-making had more important impacts than privatization on the economic growth [10].
Ramamurti (2000) conducted a study on 118 companies from 29 (developing and developed) countries in terms of financial and operational
performance (efficiency). In this work, profitability (operating income to sales, return on sales, return on asset, and return on capital) and
efficiency (ratio of actual sales per employee), and capital (capital expenditure to sales and capital to total assets) indicators were investigated
three years before and after privatization. Results depicted significant improvement in all indicators for all countries [13].
Bernardo Bortolott et al. (2000) studied financial and operational performance of 31 active companies in telecommunications and
communications industry in 25 developed and developing countries from 1998 to 1981 in 7-year periods. Evaluation criteria were indicators of
profitability, operational efficiency, and investment 3 years before and after privatization. The findings of this study, similar to those of the
previous research, indicated improvement of all indicators in privatized companies. One of the key findings of this study was that improvement
in profitability was mainly caused by considerable reduction in costs rather than increase of prices and also efficiency increase was resulted from
improvement in the motivation of employee sand productivity [2].

4.

Conceptual model and research variables

Independent variable: Privatization

According to the audited financial statements of 2006 and 2007 approved by Tehran Stock Market, National Iranian Copper Industries Company
entered capital market of Tehran Stock Market on 19 July 2006. Until the end of the fiscal year ending on 29/12/2006, 5% of its share was
delegated. During the fiscal year ending on 29/12/2007, the company's share delegation percent to the non-governmental sector increased to
52.52% and the actual change of ownership from public to private sectors occurred in 2007. In this study,2006, 2005, 2004, and 2003 were
considered years before privatization and 2008, 2009, 2010, and 2011 were years after privatization.

Dependent variables included:

1.
2.
3.
4.
5.

Company's sales growth rate: (GR)

Sales of previous year - Sales of current year/ Sales of previous year
Average return on equity:(ROE)
Profit before tax/Equity
Average return on assets:(ROA)
Profit before tax/Overall assets
Operating cash flow (operating profit + depreciation):(OCF)
Depreciation cost + Operating costs-Final cost of sold goods - Net sales
Management accounting indicators in the questionnaire were as follows:
1) Re-engineering process

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Studying Effect of Privatization on Application of Management Accounting Tools and Performance of National Iranian Copper Industries Company
International Journal of Economy, Management and Social Sciences Vol(4), No (1), January, 2015.

2)
3)
4)

Budgeting
Breakeven analysis
Profitability analysis of products

Conceptual model
Research variables can be presented as the following model:

Performance indicators
Privatization

Applying management accounting tools

Conceptual model 1: General research model

ROA

Privatization

ROE
GR
Conceptual model 2: Relationship between performance indicators and privatization

Re-engineering process
Budgeting
Privatization
Breakeven analysis
Profitability analysis of products
Conceptual model 3: Relationship between privatization and applying management accounting tools

5.

Research hypotheses

Research hypotheses can be presented as follows:

Hypothesis 1: There is a significant relationship between privatization and return on assets in National Iranian Copper Industries Company.
Hypothesis 2: There is a significant relationship between privatization and return on equity in National Iranian Copper Industries Company.
Hypothesis 3: There is a significant relationship between privatization and sales growth percentage in National Iranian Copper Industries
Company.
Hypothesis 4: There is a significant relationship between privatization and operating cash flow in National Iranian Copper Industries Company.
Hypothesis 5: There is a significant difference in the use of re-engineering process in National Iranian Copper Industries Company before and
after privatization.
Hypothesis 6: There is a significant difference in the use of budgeting in National Iranian Copper Industries Company before and after
privatization.
Hypothesis 7: There is a significant difference in the use of breakeven analysis in National Iranian Copper Industries Company before and after
privatization.
Hypothesis 8: There is a significant difference in the use of profitability analysis of products in National Iranian Copper Industries Company
before and after privatization.

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International Journal of Economy, Management and Social Sciences Vol(4), No (1), January, 2015.

6.

Research methodology, statistical population, and sample

Since the present study was a case study in National Iranian Copper Industries Company, data were collected in two steps. To analyze its
performance, the company was studied from 2003 to 2011. Also, the statistical population for analyzing the application of management
accounting tools included senior and middle managers of National Iranian Copper Company who were in office in both periods of before and
after privatization. This questionnaire was distributed via selective sampling method among 30 middle and senior managers of the company and
then analyzed.
As noted in this study, two groups of hypotheses were stated; therefore, analysis of these hypotheses was also done in two parts:
Part one: Making hypotheses regarding performance of National Copper Company; in order to test these hypotheses, paired t-test and Pearson's
correlation coefficient were used.
Part two: Testing second category of hypotheses which were related to changes in the application of company's management accounting tools for
4-year periods before and after privatization; after preparing the questionnaires for measuring application rate of management accounting tools
and collecting relevant data, they were analyzed using paired t-test.

7.

Data analysis

7.1 Descriptive statistics

7.1.1 Descriptive statistics of financial performance
Summary of the features of descriptive statistics related to performance variables in this study is presented in table (1)
Table 1. Descriptive statistics of financial performance related to National Copper Industries Company
ROA BEFOR
ROA AFTER
ROE BEFOR
ROE AFTER
GR BEFOR
GR AFTER
OCF BEFOR
OCF AFTER

Var
0.16232
0.05128
0.29625
0.11563
0.31269
0.22355
3951054
3851600

Mean
0.1563
0.3495
0.2496
0.4550
0.6324
0.1603
3992229
12850626

Max
0.36
0.42
0.68
0.56
1.02
0.31
8985391
16596915

Min
0.02
0.30
0.04
0.30
0.26
-0.17
510977
8339199

As can be seen in Table 1, average returns on assets, equity, and operating cash flow had considerable growth after privatization, while sales
growth of the company had a descending trend. To better investigate the variables, financial performance graphs before and after privatization
were used:

15000000
10000000
5000000
0
Figure 1. Operating cash flow before and after privatization

0.8
0.6
0.4
0.2
0
Figure 2. Sales growth percentage of the company before and after privatization

As can be observed, operating cash flow had a dramatic increase after privatization of the National Iranian Copper Industries and its entry in to
the capital market, while sales growth percentage had a descending trend due to various reasons including sanctions and political and economic
problems.

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Studying Effect of Privatization on Application of Management Accounting Tools and Performance of National Iranian Copper Industries Company
International Journal of Economy, Management and Social Sciences Vol(4), No (1), January, 2015.

0.4
0.3
0.2
0.1
0
Figure 3. Average return on assets before and after privatization

0.5
0.4
0.3
0.2
0.1
0
Figure 4. Average return on equity

According to Figures 3 and 4, average returns on assets and equity in National Iranian Copper Industries Company had an as ceding trend after
privatization.
7.1.2 Descriptive statistics of the application of management accounting tools
To investigate impact of privatization on application rate of management accounting tools, a questionnaire was used. Information of the
respondents is summarized in the following tables.
First, information related to the questionnaire distribution and obtained responses is investigated:
Table 2. Data of distributed questionnaires
Description
Distributed questionnaires
Responded questionnaires
Non-responded questionnaires
Total

Number
56
40
16
56

Percent
100
71
29
100

7.1.3 Organizational position of respondents

Responses obtained from the collected questionnaires for the variable of organizational position are listed in Table 3:
Table 3. Frequency distribution and frequency percent of sample size in terms of organizational position
Organizational position
Senior executives
Middle managers
Total

Frequency
26
14
40

Frequency percent
65
35
100

Table 3 shows distribution of the studied sample based on organizational position. Accordingly, 26 people (65% of the sample) were senior
managers and 14 (33.6%) were middle managers. Distribution of the sample based on organizational position is presented in Figure 3.
7.2 Inferential statistics
7-2-1- Paired samples t-test:
Paired t-test was used for the analysis of samples in two different situations (before and after privatization) and effects of independent on
dependent variables were studied. To do this test, each variable was first averaged both before and after privatization and then the hypotheses
were explored.

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International Journal of Economy, Management and Social Sciences Vol(4), No (1), January, 2015.

7-2-1-1- First hypothesis

There is a significant relationship between privatization and return on assets in National Iranian Copper Industries Company.
In t-test with paired samples, if p-value is greater than the significance level (0.05), null hypothesis (H0) is accepted; if p-value is smaller than
the significance level (0.05), H0 is rejected and consequently H1 will be accepted.
Summary of hypothesis testing can be found in the table below:
Table 4. Summary of paired t-test for return on assets
ROA
Mean before mean after

t
-2.521

df
3

Sig. (2-tailed)
0.086

As can be seen, p-value was greater than the significance level (0.05) and H1 was rejected. Thus, H0 was accepted; i.e. rate of return on assets in
National Iranian Copper Industries Company before and after privatization had no significant change.
7.2.1.2 Second hypothesis
There is a significant relationship between privatization and return on equity in National Iranian Copper Industries Company.
In paired samples t-test, if p-value is greater than the significance level (0.05), H0 is accepted; if p-value is smaller than the significance level
(0.05), H 0 is rejected and, as a result, H 1 will be accepted. Summary of hypothesis testing can be observed in the table below:
Table 5. Summary of paired t-test for return on equity
ROE
Mean before mean after

t
-1.356

df
3

Sig. (2-tailed)
0.268

As can be seen, p-value was greater than the significance level (0.05) and H1was rejected; consequently, H0was accepted; i.e. rate of return on
equity in National Iranian Copper Industries Company had no significant change before and after privatization.
7.2.1.3 Third hypothesis
There is a significant relationship between privatization and sales growth percent in National Iranian Copper Industries Company.
In paired samples t-test, if p-value is greater than the significance level (0.05), H0 is accepted; if p-value is smaller than the significance level
(0.05), H 0 is rejected and, as a result, H 1 will be accepted. Summary of hypothesis testing can be found in the table below:
Table 6. Summary of paired t-test for sales growth percentage
GR
Mean before mean after

t
-5.589

df
3

Sig. (2-tailed)
0.011

Thus, p-value was smaller than the significance level (0.05) and H0 was rejected. As a result, H1 was accepted. Then, sales growth percentage of
National Iranian Copper Industries significantly changed before and after privatization.
7.2.1.4 Fourth hypothesis
There is a significant relationship between privatization and operating cash flow in National Iranian Copper Industries Company.
In paired samples t-test, if p-value is greater than the significance level (0.05), H0 is accepted; if p-value is smaller than the significance level
(0.05), H 0 is rejected and, as a result, H 1 will be accepted. Summary of hypothesis testing can be found in the table below:

OCF
Mean befor mean after

Table 7. Summary of paired t-test for operating cash Flow

t
df
13.397
3

Sig. (2-tailed)
0.001

As can be observed, p-value was smaller than the significance level (0.05); so, H 0 was rejected and, as a result, H1 was accepted. Thus, operating
cash flow in National Iranian Copper Industries significantly changed before and after privatization.
7.3 Examining hypotheses of management accounting tools
To investigate this hypothesis, management accounting tools applied in National Iranian Copper Industries Company were first studied:
According to the view of respondents, four tools of management accounting (breakeven analysis, budgeting, re-engineering process, and product
profitability analysis) had been used in Copper Company before and after privatization. Now, according to the obtained responses, each of these
tools can be investigated before and after privatization of this company.

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Studying Effect of Privatization on Application of Management Accounting Tools and Performance of National Iranian Copper Industries Company
International Journal of Economy, Management and Social Sciences Vol(4), No (1), January, 2015.

Table 8. Management accounting tools in National Iranian Copper Industries Company

Number
1
2
3
4
5
6
7
8
9
10
11
12

Management accounting tools

Target-based costing
Activity-based costing
Balanced evaluation
Re-engineering process
Budgeting
Responsibility measurement accounting
Deviation analysis
Breakeven analysis
Shareholder value analysis
Value chain analysis
Product life cycle analysis
Product profitability analysis

Applied or Reject
Not applied
Not applied
Not applied
Applied
Applied
Not applied
Not applied
Applied
Not applied
Not applied
Not applied
Applied

7.3.1 Investigating sixth and eighth hypotheses:

Table 9. Summary of t-test for management accounting tools
Management accounting tools
Re-engineering process
Budgeting
Breakeven analysis
Product profitability analysis

Sig. (2-tailed)
0.000
0.000
0.000
0.000

df
39
39
39
39

t
-13.181
-10.817
-14.022
-10.020

As can be seen, p-value was smaller than the significance level (0.05); so, H0 was rejected and, as a result, H1was accepted. Thus, management
accounting tools in National Iranian Copper Industries significantly changed before and after privatization. Now, each tool will be examined
before and after privatization so that increased or decreased application rates of these tools can be specified.
Table 10. Percentage of response to the question on re-engineering process
Variable
Application rate
Re-engineering process

Before privatization
High
Average
Low
0
0
3

Very high
0

Very low
37

Very high
0

After privatization
High
Average
Low
0
9
27

Very low
4

According to Table (10), application rate of re-engineering process tools increased after privatization in managers' views.

Table 11. Percentage of response to budgeting question

Variable
Application rate
Budgeting

Very high
0

High
6

Before privatization
Average
Low
31
3

Very low
0

After privatization
High
Average
Low
24
11
0

Very high
5

Very low
0

As can be deduced from Table (11), the respondents stated a dramatic increase in budgeting tool.
Table 12. Percentage of response to the question on breakeven analysis
Variable
Application rate
Breakeven analysis

Very high
0

Before privatization
High
Average
Low
0
1
5

Very low
34

Very high
0

High
0

After privatization
Average
Low
13
25

Very low
2

As shown in Table (12), breakeven analysis tool was rarely used before privatization or its application was developing; but, after privatization, it
was moderately used.
Table 13. Percentage of responses to the question on product profitability analysis
Variable
Application rate
Product profitability analysis

Very high
0

Before privatization
High
Average
Low
0
3
14

Very low
23

Very high
0

After privatization
High
Average
Low
4
31
5

According to the above table, product profitability analysis was not used before privatization; but, it was moderately used after wards.

Very low
0

Reza Dehgan *, Ahmad Khodamipour, Zinolabedin Sadeghi

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International Journal of Economy, Management and Social Sciences Vol(4), No (1), January, 2015.

8.

Results and recommendations

Given the importance of privatization and increasing efficiency of companies, which is among the objectives required for privatization policy,
this study examined effects of privatization, performance manner of National Iranian Copper Industries Company, and application of
management accounting tools after privatization.
In order to evaluate the performance of this company as one of the mineral industries, this research investigated indicators of return on assets,
return on equity, operating cash flow, and sales growth percentage. Also, to study management accounting tools, budgeting, breakeven analysis,
product profitability analysis, and re-engineering process were used. Paired t-test was applied to analyze the hypotheses and the results showed
that operating cash flow considerably grew after privatization and there was a relationship between privatization and operating cash flow. Also, a
significantly negative relationship was found between privatization and company's sales growth percentage. Moreover, some management
accounting tools (breakeven analysis, re-engineering process, product profitability analysis, and budgeting) were significantly related to
privatization.

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