Enhancing Corporate Performance of the Textile and Clothing Manufacturing Sector through Strategic Cost Management Accounting Techniques

Gwangwava, Edison (2018)


The business environment in Zimbabwe has evolved over the recent years and continues to evolve. The adoption of the economic structural adjustment programme in 1999 enabled globalization to take place in Zimbabwe. The opening up of the country to the global world, coupled with the coming in of new technology has intensified competition in the manufacturing sector, textile and clothing manufacturing not excluded. The change in the operating environment brought about challenges and opportunities for the manufacturing sector. This study assessed factors that influence adoption and implementation of strategic cost management accounting in the textile and clothing sector. The study was prompted by the failure of Textile and Clothing firms to implement strategic cost management accounting systems to improve in the strategic positions. The study adopted the pragmatic philosophy and used the case study approach to explore and get deep insight into activities conducted in the textile and clothing manufacturing sector. The mixed approach to data collection was applied in a bid to collect multiple data using different tools such as the questionnaire and interview guide. The closed questionnaire based on a five point likert scale was used to collect quantitative data from a population of two hundred sampled from fifty companies. Two hundred questionnaires were sent and one hundred and fourteen questionnaires were returned successfully completed. A response rate of fifty seven percent was recorded. It was realised that several accounting researches had low response rates. The data was handled using structural equation modelling. Data was tested for normality, reliability, validity and correlation to check for multi-co linearity results of which were satisfactory and above the minimum stipulations for social sciences. Descriptive statistics were also done to see how respondents responded to each of the items in the constructs. Findings revealed that more females participated in the textile and clothing manufacturing sector than their male counter parts. In addition, findings reveal that textile and clothing manufacturing firms adopted the cost leadership and differential strategies as their main business strategy for them to survive. Furthermore, it was found that contingent factors such as environmental uncertainty had a positive significant influence on the adoption of strategic cost management accounting while organisational skilled manpower, organisational technology had a negative significant on the adoption of strategic cost management accounting. Similarly, strategic cost management accounting decision making, environmental uncertainty positive significant influence on the performance of an organisation. In conclusion national culture and organisational culture were found to have an effect on the strategic cost management accounting and its impact on organisational culture. In addition this study adds to the increasing dimension of putting emphasis on non financial performance than financial performance as a measure of organisational performance. The study recommends Textile and Clothing manufacturing firms to implement strategic cost management accounting techniques so as to obtain useful, relevant and timely information that can be used to make right decisions. Similarly, management need to understand the business environment to obtain flexibility in structure of the business by empowering employees which enhances decision making that can impact positively on an organisation. Management must be reminded that a proper fit of contingency factors such as business strategy; environmental uncertainty, organisational skilled manpower, and organisational technology have a strong positive significant influence on strategic cost management accounting. Managers need to understand the varying relationships and take cognisance of them. In view of the above, managers are reminded that a good fit between contingent factors and strategic cost management accounting results in improved organisational performance. Further studies can be carried out to examine impact of strategic cost management accounting in the manufacturing sector as a whole incorporating culture as a variable through use of the qualitative method to get deep insight into their situation.