Review

The strategic impact of integration between target costing and continuous improvements techniques in achieving cost reductions and competitive advantage: An analytical study

Dr. Majeed Abdul Hussien Hatif Al-Maryani

Assistant Prof. of Accounting, Department of Accounting, Faculty of Administration and Economic, University of AlQadisiya, Iraq

E-mail: majeed.almaryani@qu.edu.iq

Accepted August 04, 2015

Abstract

Target costing (TC) and continuous improvement (CI) are considered the most important techniques among the techniques of Strategic Management Accounting (SMA) in the field of Strategic Cost Management (SCM), they are aimed to develop the strategic performance of organizations and enhance their competitiveness, and that by finding ways to reduce costs and improve the quality of its products. In this paper, we try to show what is meant by all of the target costing technique, and continuous improvement technique? What are the variables that contributed to the appearance of each of these two techniques? What is the importance of the integration of these two techniques in achieving costs reduction and competitive advantages for organizations? Therefore, this paper aims to study the philosophy of target costing and continuous improvement techniques with an indication of the aspects of integration between them and its importance in achieving costs reduction and competitive advantage for the organization. We have used the descriptive analytical approach in this paper through the review of the literature available about the two techniques, and the study found that that the techniques of target costing and continuous improvement are among the most important techniques of strategic cost management affecting the company’s success to the implementation of it competitive strategies, and that the integration between them lead to a significant impact in the successful implementation of competitiveness strategies – least-cost, differentiation, and focus.

Keywords: Continuous Improvement Technique, Target Costing and Continuous Improvement Integration. Target Costing Technique