Impact of strategic cost management practices on organisational performance of selected manufacturing firms in Nigeria.
No Thumbnail Available
Date
2019
Journal Title
Journal ISSN
Volume Title
Publisher
Global Business Research.
Abstract
The use of the traditional cost management system (standard costing and predetermined overhead allocation system) in the manufacturing industry is less effective in product cost analysis, management, and decision making than the strategic cost management system (Activity Based Management (ABM), Life Cycle Costing (LCC), Target Costing (TC), and Total Quality Management (TQM)). Particularly in the face of continuous rising production costs, multiple product mix systems, and rising market competition resulting from globalization, it has become crucial for manufacturing firms to employ the strategic cost management system to refine product costing analysis and decision-making, and to attain production efficiency, which may lead to improved firm performance and market competitiveness. This study examines the effect of strategic cost management practices on firm performance of Nigerian manufacturing industry. The survey research design is employed to collect primary data, which are analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) method. The study reveals that strategic cost management practices positively impact organization’s performance. In light of this result of the study, it is recommended that manufacturing firms still using the traditional costing methods should consider implementing the strategic cost management techniques to enhance their performance and competitiveness.
Key words: Activity – based costing, Life cycle costing, Target costing, Performance
Description
Keywords
costing, Life cycle costing, Target costing, Performance
Citation
International Conference Proceedings of Spring 2019 New Orleans Conference of Institute of Global Business Research.