STRATEGIC MANAGEMENT ACCOUNTING AND PERFORMANCE OF LISTED FIRMS IN NIGERIA (A STUDY OF SELECTED LISTED FIRMS IN NIGERIAN MANUFACTURING INDUSTRY)
ATTENTION:
BEFORE YOU READ THE CHAPTER ONE/ABSTRACT OF THE PROJECT TOPIC
BELOW, PLEASE READ THE INFORMATION BELOW.THANK YOU!
INFORMATION:
YOU CAN GET THE COMPLETE PROJECT OF THE TOPIC BELOW. THE FULL
PROJECT COSTS N5,000 ONLY.
THE FULL INFORMATION ON HOW TO PAY AND GET THE COMPLETE PROJECT
IS AT THE BOTTOM OF THIS PAGE. OR YOU CAN CALL: 08137701720
STRATEGIC
MANAGEMENT ACCOUNTING AND PERFORMANCE OF LISTED FIRMS IN NIGERIA (A STUDY OF
SELECTED LISTED FIRMS IN NIGERIAN MANUFACTURING INDUSTRY)
ABSTRACT
Strategic
management accounting (SMA) is central to the accomplishment of organizational
objectives. Without the implementation of SMA, it would be quite difficult for
a firm to survive, given the competitive nature of business environment in
Nigeria. The study examined strategic management accounting and performance of
listed firms in Nigeria, a study of selected listed firms in Nigerian
manufacturing industry. The study prioritized on three SMA techniques namely
corporate planning, capital investment analysis and cost-volume profit
analysis. The study employed the descriptive survey design. Structured
questionnaire was administered to 144 randomly selected staff of six brewery
firms in Nigeria. The data collected were analyzed by the use of descriptive statistics
and multiple regression analysis. Findings of the study revealed that corporate
planning, capital investment analysis and cost-volume profit analysis
positively and significantly influence profitability of selected firms. In
addition, the joint effect of these three techniques is statistically
significant on firm profitability. To this end, the study suggested that
organizations should develop internal capacity and network systems in order to
be able to capture external strategic information for decision making.
Organizations should also establish units/departments that will specifically
focus on collection and analysis of external strategic information.
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
One of the
functionalities of organizations is their strategic drive that enables them
compete well in the market through sound decision making process. Ahmad (2014)
points that the principal challenge of management accounting lies on the fact
that its conventional tools such as variance analysis, budgeting, costing,
profit analysis and standard costing lack relevance to address managerial
problems in contemporary period . Apart from the irrelevance of these tools,
they are only good on paper as they lack applicability in the real world
(Ojira, 2014; Ojua, 2016). The mandate of management accounting is to supply
information to management of organizations for decision-making. These
information most times, neglects information from rival firms. Management
accounting only supplies internal information to organizations excluding
information from external stakeholders whose actions subtly affect the
performance of organization.
The
Chartered Institute of Management Accountants (2005) defines strategic management
accounting (SMA) as a form of management accounting (MA) that prioritizes on
information relating to factors external to an organization, as well as
non-financial information and internally generated information. Ojua (2016)
maintain that SMA can be captioned from two aspects – SMA as a component of
strategically-oriented accounting and the engagement of accounting
practitioners in corporate strategic decision-making processes. The application
of the tools of SMA is referred to as Strategic Management Accounting Practices
(SMAP). SMAP are various tools of accounting that supplies authentic
information to various parts of decision-making needs of an organization. The
needs of decision-making of an organization are but not limited to strategic
costing, target costing, consumer accounting, competitors accounting, strategic
decision, planning, control, performance management and evaluation (Khatabb,
etal, 2015). SMA as described by Tillman
and Goddard (2008) refers to the application of the systems of management
accounting for making strategic decisions. Techniques of SMA as enumerated by
them include activity based costing, attribute costing, brand value
budgeting, benchmarking, competitive
monitoring position, competitor cost assessment, environmental accounting
management, strategic costing, customer accounting, value chain costing and
strategic pricing.
The
techniques of SMA are effectively utilized by organizations in the developed
economies for the sole purpose of making strategic decisions (Ojira, 2014;
Ojua, 2016). The impacts of these SMA techniques have been found to positively
impact on the growth of organizations (Aremu & Oyinloye, 2014; Khatabb,
etal, 2015; Mwangi, 2014). Only few organizations in Nigeria recognized the
importance of SMA and have been consistently applying its techniques to enhance
their organizational performance (Ojua, 2016). However, the extent to which SMA
contributes to the performance of Nigerian firms is limited or perhaps,
imaginary (Fagbemi, etal., 2013).
Majority of
organizations in Nigeria still apply management accounting in their day-to-day
operations. The limitation of management accounting has been its inability to
cope with the advancement in business environment (Akenabor & Okoye, 2011).
SMA sets the pace for strategic decision making by providing vital information
to management of organization which will consequently enhance productivity and
organizational performance (Ahmad, 2014; Mwangi, 2014).
1.2 Statement of Problem
In recent
times, focus has shifted from management accounting to strategic management
accounting. The reason is simply because the latter contains financial and
non-financial information as well as internal and external data that are
beneficial to the growth of an organization.
Strategic management accounting has moved from reporting historical
information, especially on variance analysis, to taking part in the strategic
planning process of an organization (Mwangi, 2014). Strategic management accounting skills are
actively applied in the business environment where both market intelligence is
sought and evaluated, and strategic decisions are made and competitive
strategies put in place. These are factors ensures organization maximizes
profits and wealth for its shareholders and also gain competitive advantage
over its rivals. Strategic management accounting is prominent in manufacturing
outfits where firms gears effort to remain profitable and competitive (Uyar,
2010; Mwangi, 2014). These measures are particularly important in the
manufacturing sector where efficiency and cost effectiveness may be used as a
competitive tool for growth and profitability, which are measures of financial
performance. However, Uyar (2010) maintain that despite the benefits of SMA,
many companies still adopt traditional management accounting approach in their
daily business activities.
The
accounting profession in Nigeria has grown tremendously with the adoption of
International Financial Reporting Standard (IFRS) and International Audit Standard
(IAS) accounting and auditing standards. Over the years, the challenge to keep
costs down in order to keep better performance has been predominant in most
companies and especially those listed on the Nigerian Stock Exchange given the
pressure from the shareholders for firms to post better performance. With the
overall economic situation in Nigeria, investors are looking for companies that
can create wealth for them hence companies which perform poorly do not attract
investors. Strategic management accounting
offers the best opportunity for firms to compete in the market in order to
offer best quality products and services at affordable prices to
consumers. To this end, the study seeks
to ascertain how strategic management accounting through its techniques
(costing, budgeting, performance evaluation, strategic analysis) affects the
performance of listed firms in Nigerian manufacturing industry.
1.3 Research Questions
The
questions central to the study are:
Do strategic cost management practices
influence the performance of listed manufacturing firms in Nigeria?
Do strategic budgeting practices influence
the performance of listed manufacturing firms in Nigeria?
Do strategic performance evaluation
practices influence the performance listed manufacturing firms in Nigeria?
Do strategic analysis practices influence
the performance of listed manufacturing firms in Nigeria?
1.4 Objectives of the Study
The main
objective of the study is to examine the impact of strategic management
accounting on performance of listed firms in Nigeria. The specific objectives
are:
To examine the impact of strategic cost
management practices on the performance of listed manufacturing firms in
Nigeria.
To evaluate the impact of strategic
budgeting practices on the performance of listed manufacturing firms in
Nigeria.
To assess the effect of strategic
performance evaluation practices on the performance of listed manufacturing
firms in Nigeria.
To
investigate the impact of strategic analysis practices on the performance of
listed manufacturing firms in Nigeria.
1.5 Research Hypotheses
H01: Strategic cost management practices
have no significant impact on the performance of listed manufacturing firms in
Nigeria.
H02: Strategic budgeting practices have no
significant impact on the performance of listed manufacturing firms in Nigeria.
H03: Strategic performance evaluation
practices have no significant impact on the performance of listed manufacturing
firms in Nigeria.
H04: Strategic analysis practices have no
significant impact on the performance of listed manufacturing firms in Nigeria.
1.6 Significance of the Study
The use of
strategic management accounting practices amongst organizations in Nigeria is
inevitable due to their unremarkable performance over years and as a result of
weak decisions made on the dependence of obsolete traditional management
accounting information. This study through its findings exposes the need for
involvement of strategic management accounting in the operations of
organization to enhance the performance of organizations. Management of
organizations will be informed through the study on how to utilize the
techniques of strategic management accounting to boost performance and gain
competitive advantage over their rival firms.
This study
is equally important to business managers as it espouse the superiority of
strategic management accounting over ordinary management accounting. Management
of organizations, relevant stakeholders and government regulatory agencies on
business affairs will benefit as the study unveils how the provision of
business information by SMA affects the profitability, viability and
competitiveness of organizations in Nigeria.
In addition
to these, this study contributes to empirical literature on the subject matter,
which can consequently be consulted by future researchers.
1.7 Scope of the Study
The study is
confined to listed firms in Nigerian manufacturing industry. The population of
the study comprises 65 manufacturing firms quoted on the Nigerian Stock
Exchange. By applying the Taro-Yamane formula, the sample size for the study
consists of 39 quoted manufacturing firms in Nigeria. The study covers a
six-year period ranging between 2011 and 2016.
1.8 Definitions of Key Terms
Management
Accounting
Management
accounting provides only financial as well as internal information to the management
of organization.
Strategic
Management Accounting
SMA provides
financial and non-financial as well as internal and external information to
management of organization. Strategic management accounting is an improvement
over management accounting.
Firm
Performance
This refers
to extent an organization has succeeded in accomplishing its objectives. The performance of a firm cannot be
determined without the computation of financial ratios. There are many
variables used to measure firm performance, but for this study, firm
performance is measured by return on asset. Return on asset indicates the
extent to which a firm generates profit from using its total assets.
Strategic
Cost Management
This refers
to the process of effectively planning and controlling the costs involved in a
business. The process of cost management involves various activities such as
collecting, analyzing, evaluating and reporting cost statistics. Examples of
strategic cost management practices are target costing, activity-based costing
and value chain costing to mention a few.
Strategic
Budgeting
This refers
to the process of drawing up a financial plan for a defined period of time,
usually a year. This plan includes approximate costs and revenues during a
specific period and reflects future financial conditions. Examples of strategic
budgeting practices are activity-based budgeting, budgeting for planning and
flexible budgeting.
Strategic
Performance Evaluation
This refers
to the systematic evaluation of the performance of financial and non-financial
measures in an organization. Examples of strategic performance evaluation
techniques are financial measures, benchmarking and non-financial measures.
Strategic
Analysis Practices
This refers
to the process of developing strategy for an organization by researching the
business and the environment in which it operates. Examples of strategic
analysis practices include industry analysis, value-chain analysis and product
life cycle analysis.
HOW TO GET THE FULL PROJECT WORK
PLEASE, print the following instructions and information if you
will like to order/buy our complete written material(s).
HOW TO RECEIVE PROJECT MATERIAL(S)
After paying the appropriate amount (#5,000) into our bank Account
below, send the following information to 08137701720
(1) Your project topic
(2) Email Address
(3) Payment Name
(4) Teller Number
We will send your material(s) after we receive bank alert
BANK ACCOUNTS
Account Name: AMUTAH DANIEL CHUKWUDI
Account Number: 0046579864
Bank: GTBank.
OR
Account Name: AMUTAH DANIEL CHUKWUDI
Account Number: 2023350498
Bank: UBA.
NOTE:
YOU CAN ALSO MAKE A TRANSFER PAYMENT
FOR MORE INFORMATION, CALL:
08137701720AFFILIATE LINKS:
Comments
Post a Comment