Impact of Strategic Cost Management Practices on Organisation Performance of Selected Manufacturing Firms in Nigeria

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.