Strategic cost management: some reflections from experience

Abstract

The term Strategic Cost Management has not been formally defined. It is study of the interface between business strategy and cost system. The Strategic Cost Management rests on the premise that corporate strategy influences cost systems and is influenced by cost systems. The Strategic Cost Management differs from traditional management accounting in the way that the latter does not explicitly consider the role of strategy in designing cost systems, nor the effect of following a certain cost systems on a company’s strategy. The article below describes the author’s experience with the adoption by selected Indian companies the concept of Strategic Cost Management