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 55 randomly selected staff. 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 accounting 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, et al, 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.
1.3 Objectives of the Study
i. To ascertain whether selected listed firms in nigerian manufacturing industry in Akwa Ibom State have accounting strategy.
ii. To determine how accounting strategy affects the growth of the selected listed firms in nigerian manufacturing industry in Akwa Ibom State.
iii. To determine how employer respond to accounting strategy in selected listed firms in nigerian manufacturing industry Akwa Ibom State.
iv. To establish the relationship between accounting strategy and the growth of selected listed firms in nigerian manufacturing industry.
1.4 Research Questions
a. Does accounting strategy have any effect on the growth of selected listed firms in nigerian manufacturing industry in Akwa Ibom State?
b. Does accounting strategy help on the growth of selected listed firms in nigerian manufacturing industry in Akwa Ibom State?
c. Is there any relationship between accounting strategy and selected listed firms in nigerian manufacturing industry growth in Akwa Ibom State?
d. Does accounting strategy contribute to the growth of selected listed firms in nigerian manufacturing industry?
1.5 Research Hypothesis
This section of the research study consists of the two types of hypothesis, in which the researcher considered in the course of carrying out this research study; such as the null hypothesis (H0) and the Alternative Hypothesis (H1).
H0: States that accounting strategy do not have any relationship with selected listed firms in nigerian manufacturing industry development.
H1: States that accounting strategy have a relationship with selected listed firms in nigerian manufacturing industry development
H0: States that accounting strategy do not contribute to selected listed firms in nigerian manufacturing industry development
H1: States that accounting strategy contribute greatly to selected listed firms in nigerian manufacturing industry development.
1.6 Significance of the Study
The basic of this study is to seek out how Strategic management accounting will help improve selected listed firms in nigerian manufacturing industry. This study will bring about an increasing awareness in the application of management strategy on selected listed firms in nigerian manufacturing industry.
The study will also be significance to the society, since the finding of the study will bring about formulation and implementation of strategy to achieve business aims. Strategic planning force the organization to look ahead setting targets, anticipating problems and focusing on set goals and directions. The study helps to enrich the knowledge of the reader.
1.7 Scope and Limitation of the Study
To enhance an effective study within the given time frame. Uncompromising attitude of respondent’s financial constraints, time factor and unavailability of resource materials constituted some of the limitations encountered by the researcher. Despite these problems, a considerable effort has been made to process the data for the successful completion of the research.
1.8 Definition of Terms
Management: The organization and coordination of the activities of a business in order to achieve defined objectives. Management the basic task of management includes both marketing and innovation.
Strategy: As a unified comprehensive and integrated plan that relates the strategic advantages of the firm to the challenges of the environment. It is designed to ensure that the basic objectives of the enterprises are achieved through proper execution by the organization. Jauch (2015).
Effectiveness: Means doing the right things, it is the result of making the right choice and following through to their logical conclusions.
Selected listed firms in nigerian manufacturing industry: Are normally privately owned corporations, partnerships or sole proprietorships (web definition).
Productivity: Is a quantitative or statistically weightier measure of how efficiently a given set of resources is used in achieving a given set of objectives (Sauser, 2015).
Development: Is the process of growing, or is the process of increasing in size.
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Item Type: Project Material | Size: 45 pages | Chapters: 1-5
Format: MS Word | Delivery: Within 30Mins.
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