Strategic Management Accounting (SMA) is paramount to achieving your company’s goals. Given the competitive nature of Nigeria’s business environment, it would be very difficult for a company to survive without an SMA implementation. This study explored the impact of SMA on the profitability of companies in the Nigerian brewing industry. This study focused on his three SMA techniques: business planning, investment analysis, and cost volume revenue analysis. A descriptive survey design was used in this study. A structured questionnaire was presented to 144 randomly selected employees from six Nigerian breweries. Collected data were analyzed using descriptive statistics and multiple regression analysis. The results of this study showed that business planning, investment analysis, and cost-volume-profit analysis positively and significantly affect the profitability of selected companies. Moreover, the combined effect of these three techniques on business profitability is statistically significant. To this end, research suggested that organizations should develop internal capabilities and network systems to obtain external strategic information for decision making. The organization should also establish a unit/department dedicated to collecting and analyzing external strategic information.

chapter One


1.1 Research background

One of the functions of an organization is strategic impetus. This allows us to compete well in the market through a sound decision-making process. Ahmad (2014) points out that a major challenge in management accounting is the fact that traditional tools such as variance analysis, budgeting, costing, profit analysis and standard costing are not adequate to deal with modern management problems. It is pointed out that it is in Although these tools are irrelevant, they are only useful on paper as they are not applicable in the real world (Ojira, 2014; Ojua, 2016). The task of management accounting is to provide the management of an organization with information for decision making. This information mostly ignores information from competitors. Management accounting provides an organization with only internal information, excluding information from external stakeholders that have a subtle impact on the organization’s performance.

The Chartered Institute of Management Accountants (2005) defines Strategic Management Accounting (SMA) as a form of Management Accounting (MA) that prioritizes information about external factors to an organization, as well as non-financial and internally generated information. doing. Ojua (2016) argues that SMA can be explained in two aspects. SMA as part of strategy-oriented accounting and the involvement of accounting practitioners in strategic corporate decision-making processes. The use of SMA tools is called Strategic Management Accounting Practices (SMAP). SMAP is a variety of accounting tools that provide reliable information for various parts of an organization’s decision making. Organizational decision-making requirements include strategic costing, target costing, consumer accounting, competitor accounting,

1.2 Problem Description

SMA emphasizes the latest information and analysis required for management decision-making. SMA provides managers and business owners with relevant information to make informed business decisions. Despite the benefits associated with SMA, the rate of adoption and implementation by Nigerian organizations is very low. According to Mwangi (2014), most organizations shy away from practicing SMA because they believe the costs of implementation outweigh the potential benefits. Similarly, Ojua (2014) found that SMA practices are prevalent in large organizations. This is because we have the necessary financial capacity to implement SMA practices. One of the biggest complaints about SMA is that many of its techniques are inconsistent with generally accepted accounting principles (Uyar, 2010). For example, Activity-Based Costing provides decision makers with accurate cost information about alternative methods of allocating costs to products. However, this method does not allocate all manufacturing costs to the product and is therefore not GAAP compliant. Furthermore, SMA practices have not gained prominence in the Nigerian business environment due to the enormous costs involved. Designing, implementing, monitoring, and evaluating an SMA takes time and money. This may include removing current employees from their regular duties, hiring additional employees, and hiring outside consultants. Organizations should therefore consider the total cost from the design stage to the execution stage. Few companies in Nigeria are able to finance SMAs from the design stage to the construction stage. Additionally, the SMA methodology emphasizes the timeliness of information, enabling business managers to make decisions. This represents a compromise with reliability. For example, an organization wishing to determine next year’s sales must wait until next year for accurate and reliable information. Information provided by SMA is based on projections, conclusions and projections and may not be fully relied upon. SMA may not provide reliable information regarding future events.

However, empirical evidence from developed countries shows that SMA contributes to firm profitability, facilitates sound business decisions and enhances firm competitive advantage. There are few studies on SMA and firm profitability in Nigeria. This is partly due to the awareness of SMA by Nigerian organizations. That said, expanding coverage to emerging countries like Nigeria is essential. Therefore, this study examines the impact of SMA on the profitability of Nigerian firms in relation to the brewing sub-sector of Nigeria’s manufacturing industry.

1.3 Purpose of the survey

The primary objective of this study is to assess the impact of strategic management accounting on the profitability of companies in the Nigerian brewing industry. Specific goals are:

An assessment of the impact of business plans on the profitability of brewing companies in Nigeria. To study the impact of capital investment analysis on the profitability of Nigerian brewing companies.
To assess the impact of a cost-volume-profit analysis on the profitability of companies in the Nigerian beer industry.
1.4 Research question

This study seeks to provide satisfactory answers to the following research questions.

Are Business Plans Affecting the Profitability of Nigerian Beer Industry Companies?
Are Investment Analysis Affecting Nigerian Brewing Company Profitability?
Is Cost Volume Profit Analysis Affecting Nigerian Beer Industry Company Profitability? 1.5 Research hypothesis

Business plans do not have a significant impact on the profitability of companies involved in the Nigerian brewing industry.
The capex analysis does not have a significant impact on the profitability of companies in the Nigerian brewing industry.
Nothing in the Cost-Volume-Profit Analysis

1.6 Validity of research

The use of strategic management accounting practices among Nigerian organizations has been shunned as a result of weak decisions made over the years to rely on unremarkably profitable and outdated traditional management accounting information. No. The results of this study show that strategic management accounting must be incorporated into organizational processes to increase organizational profitability. Organizational management is informed by studying how to increase profitability and gain a competitive advantage over rival firms using the techniques of strategic management accounting.

This study is equally important for business leaders, as it advocates the superiority of strategic management accounting over conventional management accounting. As the research reveals how providing business information through strategic management accounting impacts the profitability, profitability and competitiveness of Nigerian organizations, the management of organizations, relevant stakeholders, and government business regulators will benefit. Moreover, this study contributes to the empirical literature on this topic, which can consequently be consulted by future researchers.

1.7 Scope of investigation

The research is limited to selected listed companies in the Nigerian brewing industry. The survey population consists of accountants, auditors, marketing managers, sales managers, production managers, purchasing managers, and other types of executives from selected companies. According to available statistics, he has 1,441 executives in some companies in the brewing industry. Selected companies include Guinness Nigeria Plc, International Brewery Plc, Mopa Brewery, Nigeria Brewery Plc, Champion Brewery Plc and Sona Brewery Plc. 1.8 Operational definition

business accounting

Management accounting provides only financial and inside information to the management of an organization.

strategic management accounting

SMA is a type of accounting that focuses not only on the internal factors of the company, but also on external factors. This includes industry-wide financials, averages, and future trends.

Corporate Planning

It’s a systematic approach to clarifying company goals, making strategic decisions, and tracking progress towards achieving those goals.

investment analysis

A budgeting process used by businesses and government agencies to assess the potential return on long-term investments. Cost-Volume-Profit Analysis

It refers to the analysis used to determine how changes in costs and volumes affect a company’s operating and net profits.

business profitability

It refers to the extent to which an organization has successfully achieved its goals.


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