The Relationship between Cost Reduction Techniques and Profitability
Akintola, S. K. *
Department of Accounting, Federal School of Statistics, Nigeria.
Omotola, A. A.
Department of Accounting, Federal School of Statistics, Nigeria.
Adeeyo, I. T.
Department of Accounting, Federal School of Statistics, Nigeria.
*Author to whom correspondence should be addressed.
Abstract
The main difficulty encountered by organizations recently is the increase in the cost of operation that could lead to inevitable cost control and reduction scheme which makes it difficult for most organizations to operate at the cost-efficient frontier. The main objective of this study is to determine the relationship between Cost reduction technique antecedents and profitability of organizations in a selected manufacturing company, Oyo state, Nigeria.
The study adopted a descriptive research design. The targeted population was employees in the selected manufacturing company. The unit of observation was sales managers, salespersons, and employees. The sample size was 80. SPSS was used to organize code and generate a quantitative report. The data were analyzed using descriptive and inferential statistics.
The study found that fleet management is positively correlated with profitability in selected manufacturing company (r = 0.564; P-value = 0.000<0.05). The result reviewed that there’s a significant relationship between fleet management and profitability in selected manufacturing companies. It was also found that there is a positive relationship between management control and profitability of the selected manufacturing company. The third hypothesis also shows that there is a positive relationship between improved manpower and profitability in a selected manufacturing company.
Moreover, the study concluded that there is a relationship between Cost reduction technique antecedents and profitability of organizations in a selected manufacturing company. The study recommended that Cost control and cost reduction scheme must be properly administered in an organization by setting a realistic standard.
Keywords: Cost reduction techniques, profitability, fleet management, management control, improved manpower