Strategic Cost Management: Conceptual Underpinning

Abstract

The Management Accountant has to adopt an integrated approach to apply his knowledge and skill to select the right strategy in a given situation and apply the appropriate tool for better cost management. Due to changes in economic policies during the last decades, Indian companies have been facing more and more competition even in the home market. To become a successful player in the marketplace, one has to be quality-conscious and cost-effective. Cost is one of the key success factors and has to be managed efficiently. A firm that fails to reduce costs as rapidly as its competitors do, will find its profit margin squeezed and its existence threatened. It is no longer enough to say, "Reduce costs by 10 percent across board."