The Impact of Cost Control Strategies on Companies Performance and Growth: Evidence from Some Selected Companies in Zimbabwe
Author(s)
Wayne Chipwere , Joseph Adu-Gyamfi , Kong Yusheng ,
Download Full PDF Pages: 28-33 | Views: 876 | Downloads: 248 | DOI: 10.5281/zenodo.3702061
Abstract
The study investigated the effect of cost management on the financial performance of manufacturing firms in Zimbabwe. The specific objectives include examining the cost of inventories, the cost of labour, and the cost of sales on performance. The study will be relevant for investors, management board and regulatory bodies. The study employed a descriptive research design. The study employed panel data covering four (4) years 2014-2018 which was gathered from the financial statement of a selected manufacturing firm. The study employed the pooled regression analysis for its data analysis. The study revealed that cost of inventories has insignificant positive effect on return on equity, which depicts that cost on inventories have a positive influence of the going concern of the organization in terms of profit, but it should not be given the utmost importance has the only cost relevant components in the organization that can enhance performance. The cost of labour will increase performance but could be detrimental if the money spent on labour is taking a larger percentage of the overall profit component of the organization
Keywords
Cost control: Cost management, Financial performance, Zimbabwe
References
i. Anderson, Shannon W. (2007). Managing Costs and Cost Structure throughout the Value Chain: Research on Strategic Cost Management. Handbook of management accounting research, Elsevier Ltd.
ii. Anderson, C., Banke, D., & Janakiraman, N. (2003). Selling, General, and Administrative Costs Sticky. Journal of Accounting Research 41(1), 47 – 63.
iii. Beverley, J. (2002). ABC vs. TOC: It’s a Matter of Time. Management Accounting, 37- 40.
iv. Blocher, E., Chen, K. & Lin, T. (1999). Cost Management: A Strategic Emphasis. The McGraw Hill Companies, Inc., New York
v. Drury, C. (2004). Management and Cost Accounting, Sixth Edition. Thompson Press.
vi. Emery, W. & Marques, A. (2011). The Effects of Transaction Costs, Payment Terms and Power on the Level of Raw Materials Inventories. Journal of Operations Management, 29(1), 236-249.
vii. Ellram, Lisa M. & Stanley, Linda L. (2008). Integrating strategic cost management with a 3DCE Environment: Strategies, practices, and benefits. Journal of purchasing and supply management.
viii. Groth, John C. & Kinney, Michael R (1994).Cost Management and value creation. Management decision.
ix. Farrell, J. (1957). The Measurement of Productive Efficiency. Journal of Royal Statistical.
x. Flint, J. (2000). Improve Internal Reporting with ABC and TOC. Management Accounting, 18-24.
xi. King, K., (2008). The Decomposition of Malmquist Productivity Indexes. Journal of Productivity. 1(1), 3-4.
xii. Hamermesh, S. (1995). Labour Demand and the Source of Adjustment Costs. The Economic Journal 105 (430): 620-634.
xiii. Kallapur, S., & Eldenburg, L. (2005). Uncertainty, Real Options, and Cost Behavior: Evidence from Washington State Hospitals. Journal of Accounting Research, 2(3):1-5
xiv. Luehrman, A. (1998). Strategy in Constrains Options. Harvard Business Review, September October, 89 – 99.
xv.Moel, A. & Tufano, P. (2002). When are Real Options Exercised? An Empirical Study of Mine Closings. Review of Financial Studies. 15 (1): 35-64.
xvi. Nixon, B. (1998). Research and Development Performance Measurement: A Case Study. Management Accounting Research 9(3):329–331
xvii. Pandey, I. M. (1995). Essentials of financial management. 4th edition. Vikas Publishing House.
xviii. Steliaros, E, Thomas, M. & Calleja, K. (2006). A Note on Cost Stickiness: Some International Comparisons. Management Accounting Research. 17 (1): 127140.
xix. Zengin, Yasemin & Ada, Erhan. (2010). Cost Management through product design: Target costing approach. International journal of production research.
Cite this Article: