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The association between strategic cost management and enterprise risk management: A critical literature review

Journal Article


Abstract


  • Reviewing literature and application of strategic cost management (SCM) and enterprise risk management (ERM) are critical and significant for corporate management to facilitate top management to employ appropriate SCM and ERM processes and systems especially in occurrence of constant and regular business turn around, crises and turbulence in recent time in world of business. This paper revisits and reviews the association between strategic cost management and enterprise risk management. Based on this review, the following propositions were developed; firm, which adopted SCM, is more likely to adopt ERM approach, there is a positive relationship between audit type and the association between ERM and SCM, and there is a positive relationship between company size and the association between ERM and SCM. The association between ERM and SCM differs from industry to another. The study also develops a framework for SCM composes of the following items: SWOT analysis, benchmarking, competitive advantage, value chain analysis, implement strategy that reduce cost during the value chain analysis by using target costing, accounting based-costing, accounting based-management, just in time, total quality management, life cycle, theory of constraints, and measure performance by using balanced scorecard.

Publication Date


  • 2011

Citation


  • Elsayed, M., Wickramainghe, A., & Razik, M. A. (2011). The association between strategic cost management and enterprise risk management: A critical literature review. Corporate Ownership and Control, 9(1 B), 184-195. doi:10.22495/cocv9i1c1art3

Scopus Eid


  • 2-s2.0-84897129846

Web Of Science Accession Number


Start Page


  • 184

End Page


  • 195

Volume


  • 9

Issue


  • 1 B

Abstract


  • Reviewing literature and application of strategic cost management (SCM) and enterprise risk management (ERM) are critical and significant for corporate management to facilitate top management to employ appropriate SCM and ERM processes and systems especially in occurrence of constant and regular business turn around, crises and turbulence in recent time in world of business. This paper revisits and reviews the association between strategic cost management and enterprise risk management. Based on this review, the following propositions were developed; firm, which adopted SCM, is more likely to adopt ERM approach, there is a positive relationship between audit type and the association between ERM and SCM, and there is a positive relationship between company size and the association between ERM and SCM. The association between ERM and SCM differs from industry to another. The study also develops a framework for SCM composes of the following items: SWOT analysis, benchmarking, competitive advantage, value chain analysis, implement strategy that reduce cost during the value chain analysis by using target costing, accounting based-costing, accounting based-management, just in time, total quality management, life cycle, theory of constraints, and measure performance by using balanced scorecard.

Publication Date


  • 2011

Citation


  • Elsayed, M., Wickramainghe, A., & Razik, M. A. (2011). The association between strategic cost management and enterprise risk management: A critical literature review. Corporate Ownership and Control, 9(1 B), 184-195. doi:10.22495/cocv9i1c1art3

Scopus Eid


  • 2-s2.0-84897129846

Web Of Science Accession Number


Start Page


  • 184

End Page


  • 195

Volume


  • 9

Issue


  • 1 B