THE ROLE OF COST MANAGEMENT STRATEGIES FOR SME BUSINESS: A CONCEPTUAL FRAMEWORK
Keywords:
Cost management, SMEs business, 21st century, ADB, OECD.
Abstract
The main purpose of this research is to concern analytic knowledge of the role of cost management strategies for SMEs business and create financial sustainability. SME enterprises are playing a key role in creating entrepreneurship and eliminating unemployment in every country by raising capital through various means. In this case, the expected triumph will not come unless there is a proper concept on cost management. The effectiveness of Cost Management policy for perspective Planning in the finance with a point of next and accelerate growth in SMEs business. The authors have been used a conceptual model and employed secondary data, and developed hypotheses based on the significance of research objectives. The theoretical analysis carries out the standard cost management strategies with advantages and disadvantages, and financial management is providing remarkable knowledge to SME organizations and entrepreneurs as well as emphasized for creating specific strategies based on business. The article has been conducted current theoretical knowledge, and only analyzes the accomplishment of management policies on the enhancement of SMEs business field that limits the scope of the research quarry. This research contributes to the potential knowledge and delivers an applicable conceptual framework for the 21st century of the various small and medium business sectors.
JEL Classification Codes: M31, B20, M39.
References
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Anderson, S. W. (2006). Managing Costs and Cost Structure throughout the Value Chain: Research on Strategic Cost Management. Handbook of Management Accounting Research, 2, 481-506.
Ang, J. S. (1991). Small Business Uniqueness and the Theory of Financial Management. Journal of Small Business Finance, 1 (1), 1-13.
Araujo, J. A., & da Costa, R. P. (2005). Operations strategy and cost management. Journal of Information Systems and Technology Management, 2 (3), 291-303.
Aristovnik, A., & Obadić, A. (2015). The impact and efficiency of public administration excellence on fostering SMEs in EU countries. Amfiteatru Economic Journal, 17 (39), 761-774.
Asian Development Bank. (2020). Asia small and medium-sized enterprise monitor 2020.
Asian Development Bank. (2016). SMEs in Developing Asia New Approaches to Overcoming Market Failures.
Bangladesh Bank. (2010). Small and Medium Enterprise (SME) Credit Policies & Programmes. SME & Special Programmes Department.
Bangladesh Bank. (2010). Small and Medium Enterprise (SME) Credit Policies & Programmes.
Bank, W. (2020). Power outages in firms in a typical month.
Boohene, R., Sheridan, A., & Kotey, B. (2008). Gender, personal values, strategies and small business performance: A Ghanaian case study. Equal Opportunities International, 27 (3), 237-257. https://doi.org/10.1108/02610150810860075.
Boyle, R. D., & Desai, H. B. (1991). Turnaround Strategies for Small Firms. Journal of Small Business Management, 29 (3), 33.
Central Bank of India. (2020). Interest Rate on Loan.
Central bank of nigeria. (2010). N200 billion small and medium enterprises (sme) credit guarantee scheme (smecgs).
Ditkaew, K. (2018). The Effects of Cost Management Quality on the Effectiveness of Internal Control and Reliable Decision-Making: Evidence from Thai Industrial Firms. Advances in Social Science, Education and Humanities Research.211, pp. 60-69. Atlantis Press.
Djauhari sitorus. (2017). Improving access to finance for SMEs in Tanzania: Learning from Malaysia’s experience. The World Bank.
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Ferrari, A., Masetti, O., & Ren, J. (2018). Interest Rate Caps: The Theory and the Practice. Policy Research Working Paper.
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Government of Canada. (2020). Key Small Business Statistics — 2020.
IFC. (2018). The unseen sector a report on the msme opportunity in south africa.
ITU. (2021). World Telecommunication/ICT Indicators Database.
JICA. (2017). Data Collection Survey on Small and Medium Enterprise Finance in the United Republic of Tanzania.
Jindrichovska, I. (2013). Financial Management in SMEs. European Research Studies , 80-96.
Kaličanin, D., & Todorović, M. (2014). Interactions between business and financial strategies in serbian companies. Economic Annals , 55-74, https://doi.org/10.2298/EKA1403055K.
Karadag, H. (2015). Financial Management Challenges In Small and Medium-Sized Enterprises: A Strategic Management Approach. Emerging Markets Journal, 5 (1), 26-40, https://doi.org/10.5195/emaj.2015.67.
Kenyon, G. N., & Meixell, M. J. (2011). Success factors and cost management strategies for logistics outsourcing. Journal of Management and Marketing Research .
Kumar, A., & Nagpal, S. (2011). Strategic cost management – suggested framework for 21st Century. Journal of Business and Retail Management Research, 5 (2), 118-130.
Kyobe, M. E. (2004). Investigating the Strategic Utilization of IT Resources in the Small and Medium-Sized Firms of the Eastern Free State Province. International Small Business Journal, 22 (2), 131–158, https://doi.org/10.1177%2F0266242604041311.
Langfield-smith, k. (1997). Management control systems and strategy: a critical review. Accounting, Organizations and Societ, 22 (2), 207-232, https://doi.org/10.1016/S0361-3682(95)00040-2.
Li, Y. (2017). The Research of the Financial Strategy of SY Education Consulting Group. Business and Management Research, 6 (3), 17-21, https://doi.org/10.5430/bmr.v6n3p17.
Mahmood, M. (2008). Labour productivity and employment in Australian manufacturing SMEs. International Entrepreneurship and Management Journal , 51–62.
Malayeri, a. D., & mastorakis, n. E. (2012). Innovative Management in Cost Management Strategies . Advances in Finance and Accounting , 360-365.
Malhotra, R., & Temponi, C. (2010). Critical decisions for ERP integration: Small business issues. International Journal of Information Management, 30 (1), 28–37, https://doi.org/10.1016/j.ijinfomgt.2009.03.001.
Michael, O. B. (2013). Strategic Cost Management as a recession survival tool in the Nigerian Manufacturing and Financial Service Industries. Research Journal of Finance and Accounting, 4 (11), 71-81.
Ministry of Business. (2018). New Zealand’s Support for Small Business. New Zealand Government.
OECD. (2010). Business climate development strategy.
OECD. (2015). Enhancing access to finance for SME development in Tajikistan.
OECD. (2015). Enhancing access to finance for SME development in Tajikistan.
OECD. (2021). Financing SMEs and Entrepreneurs: An OECD Scoreboard.
Olawale, F., & Garwe, D. (2010). Obstacles to the growth of new SMEs in South Africa: A principal component analysis approach. African Journal of Business Management , 729-738.
PWC. (2020). PwC’s MSME Survey 2020.
Rehman, N. U., Çela, A., Morina, F., & Gura, K. S. (2019). Barriers to growth of SMEs in Western Balkan countries. Journal of Management Development , 2-24.
Rocha de Araujo, J. A., & Pacheco da Costa, R. (2005). Operations strategy and cost management. Journal of Information Systems and Technology Management, 2 (3), 291-303.
Salazar, A. L., Soto, R. C., & Mosqueda, R. E. (2012). The impact of financial decisions and strategy on small business competitiveness. Global journal of business research, 6 (2), 93-103.
Sandada, M., & Dubihlela, J. (2017). Impact of Strategic Planning on Small and Medium-Sized Enterprises’ (SMEs)Performance: The Role of Employee Participation,Implementation Incentives and Evaluation and Control. Journal of Economics, 5 (1), 45-55, http://dx.doi.org/10.1080/09765239.2014.11884983.
Savić, B., Vasiljević, Z., & Đorđević, D. (2014). Strategic cost management as instrument for improving competitiveness of agribusiness complex. Economics of Agriculture , 1005-1020.
Sulanjaku, M., & Shingjergji, A. (2015). Strategic cost management accounting instruments and their usage in albanian companies. European Journal of Business, Economics and Accountancy, 3 (5), 44-50.
The World Bank. (2017). Quality of overall infrastructure.
The World Bank. (2020). The Human Capital Index 2020 Update.
TRADE, M. O. (2003). Small and medium enterprise development policy 2003. Tanzania.
Transparency International. (2020). Corruption perceptions index 2020.
Umadia Sr, K., & Kasztelnik, K. (2020). The Financial Innovative Business Strategies of Small to Medium Scale Enterprises in Developing Country and Influence for the Global Economy Performance. SocioEconomic Challenges, 4 (3), 20-32, https://doi.org/10.21272/sec.4(3).20-32.2020.
United States International Trade Commission. (2010). Small and Medium-Sized Enterprises: Overview of Participation in U.S. Exports.
Voronkova, o. V., firova, i. P., kurochkina, a. A., & bikezina, t. V. (2019). Management features of small and medium-sized business enterprises. Revista ESPACIOS, 40 (34).
Wall, B., Neumark, D., & Zhang, J. (2011). Do small businesses create more jobs? New evidence for the united states from the national establishment time series. The Review of Economics and Statistics, 93 (1), 16–29, https://doi.org/10.1162/REST_a_00060.
Wang, Y. (2019). Strategic Cost Management—A Review of Research Status at Home and Abroad. Modern Economy, 10, 513-522, https://doi.org/10.4236/me.2019.102035.
Winborg, j., & Landströmb, H. (2001). Financial bootstrapping in small businesses: Examining small business managers' resource acquisition behaviors. Journal of Business Venturing, 16 (3), 235-254, https://doi.org/10.1016/S0883-9026(99)00055-5.
World Bank. (2021). Worldwide Governance Indicators.
World Economic Forum. (2018). Global Competitiveness Index.
World Bank. (2021). Small and Medium Enterprises (SMEs) Finance.
ADB. (2014). Sector assessment (summary): finance (small and medium-sized enterprise finance and leasing)a.
ADB. (2016). SMEs in Developing Asia New Approaches to Overcoming Market Failures.
ADB. (2017). Thematic Evaluation: ADB Support for SMEs.
Akbar, S., Ali, M., & Dalziel, M. (2011). The journey to develop educated entrepreneurs: prospects and problems of Afghan businessmen. Education & Training, 53 (5), 433 - 447, http://dx.doi.org/10.1108/00400911111147730.
Almeida Parizotto, L. d., Tonso, A., & Carvalho, M. M. (2020). The challenges of project management in small and medium-sized enterprises: a literature review based on bibliometric software and content analysis. Gestão & Produção, 27 (2), 1-23, https://doi.org/10.1590/0104-530X3768-20.
Anderson, S. W. (2006). Managing Costs and Cost Structure throughout the Value Chain: Research on Strategic Cost Management. Handbook of Management Accounting Research, 2, 481-506.
Ang, J. S. (1991). Small Business Uniqueness and the Theory of Financial Management. Journal of Small Business Finance, 1 (1), 1-13.
Araujo, J. A., & da Costa, R. P. (2005). Operations strategy and cost management. Journal of Information Systems and Technology Management, 2 (3), 291-303.
Aristovnik, A., & Obadić, A. (2015). The impact and efficiency of public administration excellence on fostering SMEs in EU countries. Amfiteatru Economic Journal, 17 (39), 761-774.
Asian Development Bank. (2020). Asia small and medium-sized enterprise monitor 2020.
Asian Development Bank. (2016). SMEs in Developing Asia New Approaches to Overcoming Market Failures.
Bangladesh Bank. (2010). Small and Medium Enterprise (SME) Credit Policies & Programmes. SME & Special Programmes Department.
Bangladesh Bank. (2010). Small and Medium Enterprise (SME) Credit Policies & Programmes.
Bank, W. (2020). Power outages in firms in a typical month.
Boohene, R., Sheridan, A., & Kotey, B. (2008). Gender, personal values, strategies and small business performance: A Ghanaian case study. Equal Opportunities International, 27 (3), 237-257. https://doi.org/10.1108/02610150810860075.
Boyle, R. D., & Desai, H. B. (1991). Turnaround Strategies for Small Firms. Journal of Small Business Management, 29 (3), 33.
Central Bank of India. (2020). Interest Rate on Loan.
Central bank of nigeria. (2010). N200 billion small and medium enterprises (sme) credit guarantee scheme (smecgs).
Ditkaew, K. (2018). The Effects of Cost Management Quality on the Effectiveness of Internal Control and Reliable Decision-Making: Evidence from Thai Industrial Firms. Advances in Social Science, Education and Humanities Research.211, pp. 60-69. Atlantis Press.
Djauhari sitorus. (2017). Improving access to finance for SMEs in Tanzania: Learning from Malaysia’s experience. The World Bank.
Elliott, G. (2004, 11 8). The seven principles of effective cost management. Retrieved 1 17, 2021, from Natural Products Insider: https://www.naturalproductsinsider.com/business-resources/seven-principles-effective-cost-management
FE Ombudsman. (2020). Small Business Counts. Australian Government.
Ferrari, A., Masetti, O., & Ren, J. (2018). Interest Rate Caps: The Theory and the Practice. Policy Research Working Paper.
Fuertes, G., Alfaro, M., Vargas, M., Gutierrez, S., Ternero, R., & Sabattin, J. (2020). Conceptual Framework for the Strategic Management: A Literature Review—Descriptive. Journal of Engineering , 1-21, https://doi.org/10.1155/2020/6253013.
Government of Canada. (2020). Key Small Business Statistics — 2020.
IFC. (2018). The unseen sector a report on the msme opportunity in south africa.
ITU. (2021). World Telecommunication/ICT Indicators Database.
JICA. (2017). Data Collection Survey on Small and Medium Enterprise Finance in the United Republic of Tanzania.
Jindrichovska, I. (2013). Financial Management in SMEs. European Research Studies , 80-96.
Kaličanin, D., & Todorović, M. (2014). Interactions between business and financial strategies in serbian companies. Economic Annals , 55-74, https://doi.org/10.2298/EKA1403055K.
Karadag, H. (2015). Financial Management Challenges In Small and Medium-Sized Enterprises: A Strategic Management Approach. Emerging Markets Journal, 5 (1), 26-40, https://doi.org/10.5195/emaj.2015.67.
Kenyon, G. N., & Meixell, M. J. (2011). Success factors and cost management strategies for logistics outsourcing. Journal of Management and Marketing Research .
Kumar, A., & Nagpal, S. (2011). Strategic cost management – suggested framework for 21st Century. Journal of Business and Retail Management Research, 5 (2), 118-130.
Kyobe, M. E. (2004). Investigating the Strategic Utilization of IT Resources in the Small and Medium-Sized Firms of the Eastern Free State Province. International Small Business Journal, 22 (2), 131–158, https://doi.org/10.1177%2F0266242604041311.
Langfield-smith, k. (1997). Management control systems and strategy: a critical review. Accounting, Organizations and Societ, 22 (2), 207-232, https://doi.org/10.1016/S0361-3682(95)00040-2.
Li, Y. (2017). The Research of the Financial Strategy of SY Education Consulting Group. Business and Management Research, 6 (3), 17-21, https://doi.org/10.5430/bmr.v6n3p17.
Mahmood, M. (2008). Labour productivity and employment in Australian manufacturing SMEs. International Entrepreneurship and Management Journal , 51–62.
Malayeri, a. D., & mastorakis, n. E. (2012). Innovative Management in Cost Management Strategies . Advances in Finance and Accounting , 360-365.
Malhotra, R., & Temponi, C. (2010). Critical decisions for ERP integration: Small business issues. International Journal of Information Management, 30 (1), 28–37, https://doi.org/10.1016/j.ijinfomgt.2009.03.001.
Michael, O. B. (2013). Strategic Cost Management as a recession survival tool in the Nigerian Manufacturing and Financial Service Industries. Research Journal of Finance and Accounting, 4 (11), 71-81.
Ministry of Business. (2018). New Zealand’s Support for Small Business. New Zealand Government.
OECD. (2010). Business climate development strategy.
OECD. (2015). Enhancing access to finance for SME development in Tajikistan.
OECD. (2015). Enhancing access to finance for SME development in Tajikistan.
OECD. (2021). Financing SMEs and Entrepreneurs: An OECD Scoreboard.
Olawale, F., & Garwe, D. (2010). Obstacles to the growth of new SMEs in South Africa: A principal component analysis approach. African Journal of Business Management , 729-738.
PWC. (2020). PwC’s MSME Survey 2020.
Rehman, N. U., Çela, A., Morina, F., & Gura, K. S. (2019). Barriers to growth of SMEs in Western Balkan countries. Journal of Management Development , 2-24.
Rocha de Araujo, J. A., & Pacheco da Costa, R. (2005). Operations strategy and cost management. Journal of Information Systems and Technology Management, 2 (3), 291-303.
Salazar, A. L., Soto, R. C., & Mosqueda, R. E. (2012). The impact of financial decisions and strategy on small business competitiveness. Global journal of business research, 6 (2), 93-103.
Sandada, M., & Dubihlela, J. (2017). Impact of Strategic Planning on Small and Medium-Sized Enterprises’ (SMEs)Performance: The Role of Employee Participation,Implementation Incentives and Evaluation and Control. Journal of Economics, 5 (1), 45-55, http://dx.doi.org/10.1080/09765239.2014.11884983.
Savić, B., Vasiljević, Z., & Đorđević, D. (2014). Strategic cost management as instrument for improving competitiveness of agribusiness complex. Economics of Agriculture , 1005-1020.
Sulanjaku, M., & Shingjergji, A. (2015). Strategic cost management accounting instruments and their usage in albanian companies. European Journal of Business, Economics and Accountancy, 3 (5), 44-50.
The World Bank. (2017). Quality of overall infrastructure.
The World Bank. (2020). The Human Capital Index 2020 Update.
TRADE, M. O. (2003). Small and medium enterprise development policy 2003. Tanzania.
Transparency International. (2020). Corruption perceptions index 2020.
Umadia Sr, K., & Kasztelnik, K. (2020). The Financial Innovative Business Strategies of Small to Medium Scale Enterprises in Developing Country and Influence for the Global Economy Performance. SocioEconomic Challenges, 4 (3), 20-32, https://doi.org/10.21272/sec.4(3).20-32.2020.
United States International Trade Commission. (2010). Small and Medium-Sized Enterprises: Overview of Participation in U.S. Exports.
Voronkova, o. V., firova, i. P., kurochkina, a. A., & bikezina, t. V. (2019). Management features of small and medium-sized business enterprises. Revista ESPACIOS, 40 (34).
Wall, B., Neumark, D., & Zhang, J. (2011). Do small businesses create more jobs? New evidence for the united states from the national establishment time series. The Review of Economics and Statistics, 93 (1), 16–29, https://doi.org/10.1162/REST_a_00060.
Wang, Y. (2019). Strategic Cost Management—A Review of Research Status at Home and Abroad. Modern Economy, 10, 513-522, https://doi.org/10.4236/me.2019.102035.
Winborg, j., & Landströmb, H. (2001). Financial bootstrapping in small businesses: Examining small business managers' resource acquisition behaviors. Journal of Business Venturing, 16 (3), 235-254, https://doi.org/10.1016/S0883-9026(99)00055-5.
World Bank. (2021). Worldwide Governance Indicators.
World Economic Forum. (2018). Global Competitiveness Index.
World Bank. (2021). Small and Medium Enterprises (SMEs) Finance.
Published
2021-12-31
How to Cite
Kajal, Z. A., Sikder, M., ., A., & Panhwar, P. (2021). THE ROLE OF COST MANAGEMENT STRATEGIES FOR SME BUSINESS: A CONCEPTUAL FRAMEWORK. International Journal of Small and Medium Enterprises, 4(1), 35-58. https://doi.org/10.46281/ijsmes.v4i1.1559
Section
Research Paper/Theoretical Paper/Review Paper/Short Communication Paper
Copyright (c) 2021 Zahirul Alam Kajal, Mukut Sikder, Ashamoni, Paruss Panhwar
This work is licensed under a Creative Commons Attribution 4.0 International License.
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