Cost Reduction Strategies and the Growth of Selected Manufacturing Companies in Nigeria

International Journal of Mechanical Engineering and Technology 10(3), 2019, pp. 196–203

8 Pages Posted: 19 Sep 2019

See all articles by Ben-Caleb Egbide

Ben-Caleb Egbide

Landmark University Omu-Aran Kwara State, Nigeria

Otekunrin Adegbola

Landmark University Omu-Aran Kwara State, Nigeria

Bamidele Rasak

Landmark University, Omu Aran, Nigeria

Adewara Sunday

Landmark University Omu-Aran Kwara State, Nigeria

Oladipo Olufemi

Landmark University Omu-Aran Kwara State, Nigeria

Eshua Ruth

Covenant University Ota Nigeria

Date Written: September 11, 2019

Abstract

The problem of high manufacturing costs has led to the shutdown of many manufacturing companies in Nigeria. This study examines the relationship between cost reduction strategies and the growth of manufacturing companies in Nigeria using data from annual reports of 40 manufacturing companies quoted on the Nigeria Stock Exchange within the period of 2012-2016. 40 manufacturing companies were sampled purposively for this study. The study took changes in material cost, changes in labour cost and changes in administrative overhead as variables for cost reduction strategies while changes in turnover as the variable for Growth. Correlation analysis was conducted to determine the association cost reduction strategies and growth while, regression analysis was used to determine the impact of cost reduction strategies on the growth of manufacturing companies. Results showed a positive significant relationship between cost reduction strategies and growth of manufacturing companies in Nigeria. The study recommends that manufacturing companies should implement value analysis in order to reduce material costs and the implementation of cost reduction strategies in all manufacturing companies in Nigeria.

Keywords: Strategic Management Accounting, Cost reduction strategies, Value analysis, Budget Discipline, Nigeria

Suggested Citation

Egbide, Ben-Caleb and Adegbola, Otekunrin and Rasak, Bamidele and Sunday, Adewara and Olufemi, Oladipo and Ruth, Eshua, Cost Reduction Strategies and the Growth of Selected Manufacturing Companies in Nigeria (September 11, 2019). International Journal of Mechanical Engineering and Technology 10(3), 2019, pp. 196–203, Available at SSRN: https://ssrn.com/abstract=3451705

Ben-Caleb Egbide (Contact Author)

Landmark University Omu-Aran Kwara State, Nigeria ( email )

Otun-Ilorin Road
Omu-Aran, KS Kwara State +234
Nigeria

Otekunrin Adegbola

Landmark University Omu-Aran Kwara State, Nigeria ( email )

Otun-Ilorin Road
Omu-Aran, KS Kwara State +234
Nigeria

Bamidele Rasak

Landmark University, Omu Aran, Nigeria ( email )

Otun-Ilorin Road
Omu-Aran, KS Kwara State +234
Nigeria

Adewara Sunday

Landmark University Omu-Aran Kwara State, Nigeria ( email )

Otun-Ilorin Road
Omu-Aran, KS Kwara State +234
Nigeria

Oladipo Olufemi

Landmark University Omu-Aran Kwara State, Nigeria ( email )

Otun-Ilorin Road
Omu-Aran, KS Kwara State +234
Nigeria

Eshua Ruth

Covenant University Ota Nigeria ( email )

P.M.B. 1023
Km 10 Idiroko road
Ota, Ogun State 234
Nigeria

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