Assessment of Cost Reduction Tools as a Means of Improving Organizational Profitability
CHAPTER ONE
OBJECTIVES OF THE STUDY
- Is to introduce the tools/techniques used for cost reduction to the company.
- To help the company adopt the techniques, in other to reduce the unnecessary cost.
- To investigate the problems encouraged in reducing cost and also the ways, the company used in reducing cost.
- Is to help the company choose or select the best tools they will use to reduce there unnecessary cost.
CHAPTER TWO
REVIEW OF RELATED LITERATURE
Concept of Cost Reduction
Low production costs has become one of the primary ways that organizations compete in a global economy, hence, cost reduction must continually be in the minds of managers of organization (McWatters, Morse, & Zimmerman, 2001). Cost reduction is a planned approach to reduce expenditure. It is a continuous process of examining critically all elements of cost and each aspect of the business with a view to improving business efficiency. cost reduction is a corrective function. Cost reduction is the process of cutting down costs incurred by an organization for the purpose of making profit. It starts when cost control ends and considers that no cost is at its optimum level. According to Adeniyi (2001), cost reduction starts with an assumption that current cost levels or planned cost levels are too high despite the fact that cost control may be good and organization experiencing high efficiency levels.
CHAPTER THREE
RESEARCH METHODOLOGY
INTRODUCTION
In this chapter, we described the research procedure for this study. A research methodology is a research process adopted or employed to systematically and scientifically present the results of a study to the research audience viz. a vis, the study beneficiaries.
RESEARCH DESIGN
Research designs are perceived to be an overall strategy adopted by the researcher whereby different components of the study are integrated in a logical manner to effectively address a research problem. In this study, the researcher employed the survey research design. This is due to the nature of the study whereby the opinion and views of people are sampled. According to Singleton & Straits, (2009), Survey research can use quantitative research strategies (e.g., using questionnaires with numerically rated items), qualitative research strategies (e.g., using open-ended questions), or both strategies (i.e., mixed methods). As it is often used to describe and explore human behaviour, surveys are therefore frequently used in social and psychological research.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
INTRODUCTION
This chapter presents the analysis of data derived through the questionnaire and key informant interview administered on the respondents in the study area. The analysis and interpretation were derived from the findings of the study. The data analysis depicts the simple frequency and percentage of the respondents as well as interpretation of the information gathered. A total of eighty (80) questionnaires were administered to respondents of which only seventy-seven (77) were returned and validated. This was due to irregular, incomplete and inappropriate responses to some questionnaire. For this study a total of 77 was validated for the analysis.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was to ascertain assessment of cost reduction tools as a means of improving organizational profitability. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of assessment of cost reduction tools as a means of improving organizational profitability
Summary
This study was on assessment of cost reduction tools as a means of improving organizational profitability. Three objectives were raised which included: Is to introduce the tools/techniques used for cost
reduction to the company, to help the company adopt the techniques, in other to reduce the unnecessary cost, to investigate the problems encouraged in reducing cost and also the ways, the company used in reducing cost and is to help the company choose or select the best tools they will use to reduce there unnecessary cost. A total of 77 responses were received and validated from the enrolled participants where all respondents were drawn from Unilever Nigeria Plc. Hypothesis was tested using Chi-Square statistical tool (SPSS).
Conclusion
The relevance of this research is to analyze the importance of cost control and cost reduction techniques on organizational performance in a highly competitive environment. For an organisation to ensure more profit growth by producing quality goods and services with available resources on the ground there is a need to control cost and reduce cost to the acceptable limit as regard to control and reduction on wastage and loss. In the course of this research, it was discovered that cost control and cost reduction techniques seen to be very essential to the growth and survival of any organisation in a highly competitive environment ranging from practical planning and setting standard, monitoring the standard till it is achieved and also strategically reducing cost expended during business activities. This all of this proves the essential need of cost control and cost reduction on organizational performance in a highly competitive market if well considered. From the finding of this research, it was evident that cost control has a positive impact on organizational performance. In order to make it a success, there is a need for organisation to apply cost control and cost reduction scheme in their operation and worker should be carried along and they must be motivated to achieve the desired goals and objectives. The absence of behaviour control such as motivation, incentives and so on among employees will affect the success of cost control and cost reduction strategies in an organisation. Element of cost such as material, labour and overhead cost worker behaviour could also be strategically controlled. Also, budget must be used to monitor the operation in the organisation in order to make sure that money and resources are not being wasted. Challenges of effective cost control and cost reduction could be solved by direct observation and supervision by management by taking note of the key non-performance indicator in any section or departments having challenges and as a result, finding ways of improving on it. As a result of this, if all the condition and measures can be taken significantly, organisation can afford to overcome its competitors by The relevance of this research is to analyze the importance of cost control and cost reduction techniques on organizational performance in a highly competitive environment. For an organisation to ensure more profit growth by producing quality goods and services with available resources on the ground there is a need to control cost and reduce cost to the acceptable limit as regard to control and reduction on wastage and loss. In the course of this research, it was discovered that cost control and cost reduction techniques seen to be very essential to the growth and survival of any organisation in a highly competitive environment ranging from practical planning and setting standard, monitoring the standard till it is achieved and also strategically reducing cost expended during business activities. This all of this proves the essential need of cost control and cost reduction on organizational performance in a highly competitive market if well considered.
The relevance of this research is to analyze the importance of cost control and cost reduction techniques on organizational profitability in a highly competitive environment. For an organisation to ensure more profit growth by producing quality goods and services with available resources on the ground there is a need to control cost and reduce cost to the acceptable limit as regard to control and reduction on wastage and loss. In the course of this research, it was discovered that cost control and cost reduction techniques seen to be very essential to the growth and survival of any organisation in a highly competitive environment ranging from practical planning and setting standard, monitoring the standard till it is achieved and also strategically reducing cost expended during business activities. This all of this proves the essential need of cost control and cost reduction on organizational performance in a highly competitive market if well considered. From the finding of this research, it was evident that cost control has a positive impact on organizational performance. In order to make it a success, there is a need for organisation to apply cost control and cost reduction scheme in their operation and worker should be carried along and they must be motivated to achieve the desired goals and objectives. The absence of behaviour control such as motivation, incentives and so on among employees will affect the success of cost control and cost reduction strategies in an organisation. Element of cost such as material, labour and overhead cost worker behaviour could also be strategically controlled. Also, budget must be used to monitor the operation in the organisation in order to make sure that money and resources are not being wasted. Challenges of effective cost control and cost reduction could be solved by direct observation and supervision by management by taking note of the key non-performance indicator in any section or departments having challenges and as a result, finding ways of improving on it. As a result of this, if all the condition and measures can be taken significantly, organisation can afford to overcome its competitors by producing quality product at lower price and become a market leader.
Recommendation
The study recommended that manufacturing companies adopt value analysis to reduce and eliminate unnecessary costs associated with products. Also, businesses should conduct regular analysis of its business process to identify and eliminate costs.
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