Strategic Cost Management as a recession survival tool in the Nigerian Manufacturing and Financial Service Industries

Abstract

The financial crisis in 2008 caused business priorities to shift from growth and leveraging up profits to issues of survival until the good times return. There was an understandable emphasis on costs; cost management was therefore seen as one of the best ways to maintain profits in the face of softening sales and shrinking margins. The objectives of the research were to determine whether Strategic Cost Management (SCM) techniques are practically used by Nigerian companies and the extent of their utilization- particularly in the Nigerian manufacturing and financial services industries, identify the factors influencing the adoption of strategic cost management and investigate whether strategic cost management can be used as competitive strategy for survival in recessionary times. Collected data were subjected to statistical procedures using the Mann-Whitney test. The research found out that although Nigerian companies are receptive to the philosophies of SCM, there are challenges inhibiting their adoption and implementation in the Nigerian environment. Manufacturing concerns also utilize the SCM tools more than the Financial Service companies. Nigerian companies were encouraged to embrace strategic cost management tools and the Nigerian government implored to formulate policies that create enabling environment to facilitate the adoption of SCM.

Keywords: Strategic Cost Management, Recessionary Times, Financial Markets, Survival,       Nigerian Companies.