Abstract
The strategic management tools and techniques, also known as modern management accounting (MA) techniques, support managers in all stages of the strategic management process of businesses to achieve better performance. However, literature review evidenced that compared to traditional MA techniques the use of modern MA techniques is low particularly in developing countries. This study thus, explores the extent to which listed companies in Sri Lanka apply selected strategic management tools and techniques: target costing, kaizen costing, balanced scorecard and benchmarking stressing influences and variations among industry sectors with these practices. This study applies the Mixed Method Research approach with its QUAN + qual paradigm. Using a multi-stage purposeful random sampling technique, 42 listed companies were selected demonstrating five industry sectors. Interviews and discussions were conducted preferably with Finance executives of companies to verify the responses to the survey which is the main source of data. Findings advocate that contrary to the low application of modern MA techniques shown in the literature, Sri Lankan companies demonstrate a high level of application of four techniques observed. Even if target costing is not applicable for the whole plantation sector, they demonstrate rather high application of other techniques observed as they often deal with international markets where excellent quality is very important. Findings ratify that extent of application of techniques varies among sectors, mostly induced by factors such as: the nature of products, processes, and markets; stage of the business; size of companies; and the impact of environmental changes on businesses. It concludes that overall Sri Lankan companies are in a view that these practices certainly facilitate them, in keeping aligned product prices with market prices and accompanying quality of products that are essential in surviving in such highly competitive markets while retaining a satisfactory margin securing brand reputation.
Highlights
With increased global competition, improved technologies and information systems have directed businesses to use new management techniques (Baykaso_glŭ and Kaplano-glŭ 2006)
Four companies in the MNF sector are planning to attend to this modification of the balanced scorecard (BSC) shortly, as they have realized the importance of this aspect too. These findings suggest that the tendency of Sri Lankan companies to adopt their own KPIs that are mostly applicable for performance measurement (PE) purposes, because they precisely match with specific characteristics of individual companies, which encourages the high application of the BSC for PE
Cost management strategies are the most important managerial tools and techniques applied by companies to survive in the competitive markets while keeping satisfactory profit margin in their businesses (Zengin & Ada, 2010)
Summary
With increased global competition, improved technologies and information systems have directed businesses to use new management techniques (Baykaso_glŭ and Kaplano-glŭ 2006). Increased competition and increased costs of designing have made imperative stimulations for the organizations to search for the right products and the right methods for manufacturing the products (Sani & Allahverdizadeh, 2012). Anna (2015) stated that managers and executives of the companies are observing appropriate tools and techniques in order to investigate the internal and external cost of the products/service, get market information, product costs, analyze customer needs and wishes, predict and assess organizational performance, so that ensuring competitive advantage. Companies are considering expansions by accessing new markets; making product and price more attractive; satisfying customers; and developing new strategies. In this concern, it induced positive significant relationship between the use of management tools and technique and organizational performance (Anna, 2015)
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