Integration's Effect of Target Costing and Value Engineering on Manufacturing Firms' Performance: Moderating Role of Competitive Strategy

Abstract

To provide a better understanding of modern strategies for cost management and use of contemporary costing techniques in a developing country, the current study aimed to examine effect of integration between the Target Costing and Value Engineering techniques and the role of competitive strategy, to enhance performance of Sudanese manufacturing firms .The researcher constructed the study hypotheses depending on the previous studies, and the contingency theory. The descriptive analytical approach was adopted in this study. The main tool of the study was a questionnaire it was used to collect data from the sample of (165) employees of the senior management of these companies, (73.9%) of the total distributed questionnaires were collected and analyzed using statistics’ software package (SPSS) to identify the common factors that explain the variation in study variables and to validate measures of the study variables. And statistical software (Amos) to explore the relationships among the study variables. The results of the study indicated that integration of Target costing and value engineering is found to be significant in relation to operational performance. However Sudanese manufacturing firms cannot achieve financial performance from such integration the positive role of applying value engineering to the operational performance of manufacturing firm has been revealed through the moderating role of the comparative strategy. The study recommends the managers should pay more attention to dimensions related to integration of target costing and value engineering that have achieved excellence for their firms. In addition, manufacturing firms should be more proactive to improve financial performance by thinking of scale, employment, efficiency and leverage.