Abstract
Nowadays, enterprises are trying hard to reach sustainability when the industry faces the challenge of high cost in the era of meager profit. Companies with corporate sustainable approaches based on cost leadership are trying to reduce operational expenses, increase business efficiency, and implement comprehensive cost reductions within their organisations. Cost is a strategic issue for businesses to survive and stand out. The deployment of profit costs is becoming strategically important to be sustainable and competitive in the market. The research design of this study integrates both qualitative and quantitative methods. 143 valid responses to snowball sampling in Taiwan (108 responses) and mainland China (35 responses) and 24 interviews with executive-level employees in Taiwan were conducted. In addition, a total of 51 companies’ financial statements were reviewed to triangulate the foundation of research findings. Reducing costs strategically should be considered as a principal concern of a firm that wants to make its efforts for business sustainability. The result shows that nonstrategic costs are between 10 and 30 percent of the sales turnover (revenue) in a firm, and strategic costs normally account for 70 to 90 percent of its all costs. Furthermore, only 20% really makes a difference to stand out from other market players. This provides a new orientation of cost management opinion that there is a need for paying more attention and extending the concept of strategic cost management to the management of nonstrategic costs. It is also supported that the dichotomy of nonstrategic and strategic is a viable and practical way for managing all costs across sectors, industries, and business scales from a strategic and sustainable perspective.
Highlights
Cost reduction is used by firms to increase profits and can be interchanged with “profit enhancement.” it is incredible, that often well-thought cost management is overlooked even though the organisation is doing its best in everything to improve profit [1, 2]
A snowball technique [45] was used to obtain a large sample, by which willing respondents invited their associates on business or private occasions to participate in the survey
It is the time to view costs from a strategic standpoint and make nonstrategic costs strategic as the key managerial implications of this study. e present study highlights the significance of nonstrategic costs and contributes several important findings in cost management
Summary
Cost reduction is used by firms to increase profits and can be interchanged with “profit enhancement.” it is incredible, that often well-thought cost management is overlooked even though the organisation is doing its best in everything to improve profit [1, 2]. Cost reduction is used by firms to increase profits and can be interchanged with “profit enhancement.”. It is incredible, that often well-thought cost management is overlooked even though the organisation is doing its best in everything to improve profit [1, 2]. It is argued in the study that cost management should occupy a vital position in enhancing business profitability and corporate sustainability. With the rise of the lean company [3] and ongoing market competition, firms should act proactively to manage costs strategically. E rising emphasis is on strategic management to assist organisational development and achieve its strategic goals for business sustainability. Cost management has moved to a strategic orientation—strategic cost management [4,5,6,7,8,9,10,11,12,13]
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
