Strategic cost management, contingent factors and performance in services

Abstract

The purpose of this paper is to investigate the relationship between contextual factors identified from contingency-based research, the extent of the use of strategic cost management (SCM) techniques and business performance in services. An empirical survey was conducted on a sample of 88 services in Greece. The analysis of the survey data indicates that the use of strategic cost management techniques in services can be considered quite satisfactory. By drawing on the grounds of contingency theory, five factors were identified as potentially exhibiting an emergent relationship with strategic cost management. The five factors are; (1) Perceived environmental uncertainty, (2) Structure, (3) Organizational life cycle stage, (4) Strategy and (5) Size. The survey revealed that SCM usage is positively affected by these five contingent factors, while SCM usage, in turn, positively affects performance. A significant mediating effect of SCM usage on performance is evident.