The role of integrating modern costing approaches, target costing, and continuous improvement, in activating strategic cost management: an applied study

Abstract

The study aimed to highlight the importance of integration between the two modern costing approaches - Target Costing (TC) and Continuous Improvement (CI) - in activating Strategic Cost Management (SCM) and thus supporting the competitive position of companies. To achieve the study objectives, accounting literature and previous studies were relied upon to clarify the stages and steps of integration between the two approaches, and to work on applying this to the data of the General Company for Electronics; By testing the study hypothesis based on data and information collected through personal interviews with commercial management employees and production engineers, reviewing cost lists, using the quality function deployment matrix, supplier relationship management matrix, optimal solution matrix, relative importance tables for product components, the degree of importance according to the five-point Likert scale, and frequency tables, the study reached the most important results, the integration of the two modern cost approaches - the target costing approach (TC) and the continuous improvement approach (CI) - constitutes a more comprehensive and essential accounting framework for cost accountants and senior management at the General Company for Electronics, supporting the activation of strategic cost management (SCM) and the company's main saving grace from losses and production cessation. The study recommended several recommendations, the most important of which is government support for the company by preserving its property and fixed assets, forming a supported committee to study the company's situation, gathering experienced staff, and providing these staff with expertise in various engineering, financial, and costing fields.