a

MIDLANDS STATE UNIVERSITY

FACULTY OF COMMERCE

DEPARTMENT OF ACCOUNTING

The Impact of rising costs on organizational performance

A case of Colouresell Furnitures

BY

Moyo Nixon

Registration number R113269V

This dissertation is submitted in partial fulfillment of the requirements of the Bachelor of

Commerce Honours Accounting Degree Program at Midlands State University

Gweru: Zimbabwe, May 2015

i

APPROVAL FORM

The signatory below confirms that they supervised Nixon Moyo on a dissertation titled:

Impact of rising costs on organizational performance :A Case of Colouresell Furnitures.

The dissertation was submitted in partial fulfillment of the requirements of the Bachelor of

Commerce Honours Degree in ACCOUNTING at Midlands State University.

…………………………………. ………………………………

SUPERVISOR DATE

…………………………………. ………………………………

CHAIRPERSON DATE

………………………………… ………………………………

EXTERNAL EXAMINER DATE

ii

RELEASE FORM

NAME OF STUDENT Nixon Moyo

DISSERTATION TITLE Impact of rising cots on organizational

performance : A Case of Colouresell

Furnitures .

YEAR THIS DEGREE GRANTED: 2015

Permission is hereby granted to the

Midlands-State-University-Library to

produce- single-copies of this dissertation

and to-lend or sell such-copies for private,

scholarly-or-scientific-research purposes-

only. However , author maintains all other

publication.

SIGNED ………………………………...

PERMANENT ADDRESS 3648 Brahim Street Rimuka High Infill

Kadoma Zimbabwe

DATE

iii

DISCLAIMER

The interpretations or solid reports in this study by any way do not represent university’s

statements or the project supervisor and in any way are not predestined to insult anyone

person, institution or organization but rather there are preordained only for academic

purposes.

iv

DEDICATION

This research dissertation is dedicated to my dearly loved Parents for always believing in me.

Thank you for all the support provided.

v

ACKNOWLEDGEMENTS

Above all I would like to thank the Almighty God for his strength and the far he has

brought me. I would like to record my sincere gratitude of appreciation to the management

and staff of Colouresell Furnitures for assisting me and helping with information in

regard to my research study and members of my family for their moral support.

vi

ABSTRACT

Coloursell Furnitures has been experiencing rising operational costs from the past four

years ranging from 2011 to 2014 financial period . To this effect this led the author to

investigate the impact of rising costs on organizational performance . Relevant literature

was reviewed to analyze the impact of rising costs on performance of the entity . The

multi regression analysis was used to test the relationship which exists between rising

costs and profitability using SPSS software .It was discovered that rising operational

costs have a negative relationship with performance of the entity although other factors

need to be considered such as current economic factors and challenges in the industry.

vii

TABLE OF CONTENTS

CHAPTER SECTION DESCRIPTION PAGE

Approval form I

Release form ii

Declarations iii

Dedications iv

Acknowledgments V

Abstract vi

ONE INTRODUCTION

1.1 Background of study 1

1.2 Statement of the problem 3

1.3. Main research question 3

1.3.1 Sub research question 3

1.4 Research objectives 3

1.5 Assumption of the study 4

1.6 Significance of study 4

1.6.1 To the organization 4

1.6.2 To the researcher 4

1.6.3 To the university 4

1.7 Limitation of study 5

1.8 Delimitation of study 5

1.9 Definition of terms 5

1.10 Summary 6

TWO LITERATURE REVIEW

2.0 Introduction 7

2.1 Challenges faced by the retail industry 7

2.1.1 Competition 7

2.1.2 Insufficient supply chain 8

2.1.3 Changing customer behavior 9

2.1.4 Advertising 10

viii

2.2 Impact of rising costs on organization performance 10

2.2.1 Reduced profits 11

2.2.2 Failure to expand operations (growth} 12

2.2.3 Declining revenues 13

2.3 An effective cost reduction program 15

2.3.1 Team work 15

2.3.2 Identifying and ranking current costs 16

2.3.3 Evaluate the importance of each cost item 17

2.3.4 Monitoring and implementing action plans 18

2.3.5 Risk factors involved 19

2.4 Methods of reducing costs and improve profits 19

2.4.1 Budgeting 20

2.4.2 Activity Based Costing 21

2.4.3 Benchmarking 23

2.4.4 Target Costing 24

2.5 Summary 26

THREE RESEARCH METHODOLOGY

3.0 Introduction 27

3.1 Research design 27

3.1.1 Descriptive research design (survey method) 27

3.2 Population 28

3.3 Sampling and sample size 28

3.4 Sampling technique 29

3.5 Data sources 30

3.5.1 Primary data sources 30

3.5.2 Secondary data sources 30

3.6 Research instruments 31

3.6.1 Interviews 31

3.6.2 Questionnaires 32

3.7 Validity 32

ix

3.8 Reliability 33

3.9 Regression model (multiples regression model} 33

3.10 Data analysis 34

3.11 Data presentation 34

3.12 Summary 35

FOUR DATA PRESENTATION AND ANALYSIS

4.0 Introduction 36

4.1 Survey response rate 36

4.1.1 Gender response 37

4.2 Level of experience with Colouresell 38

4.3 Which department do you fall in 39

4.4 Is Colouresell Furnitures experiencing rising

operational costs

40

4.5 Challenges faced by the retail industry 41

4.6 Effects of rising operational costs on the

performance of Colouresell

43

4.7 Is cost control and cost reduction a necessity 46

4.8 Factors to consider in initiating a cost reduction

program

47

4.9 Methods to control and reduce costs 50

4.10 Cost reduction an effective way of minimizing costs 52

4.11 Other information necessary concerning this topic 53

4.11.1 Current economic challenges 53

4.12 Interviews 53

4.13 Quantitative Analysis (regression results) 57

4.14 Summary 65

FIVE SUMMARY, CONCLUSIONS AND RECOMMANDATIONS

5.0 Introduction 66

x

5.1 Chapter summaries 66

5.1.1 Chapter one 66

5.1.2 Chapter two 66

5.1.3 Chapter three 67

5.1.4 Chapter four 67

5.2 Research findings 67

5.2.1 Challenges faced in retail sector 67

5.2.2 Impact of rising costs on organizational

performance

68

5.2.3 Factors to consider in an effective cost reduction

initiative program

68

5.2.4 Methods of reducing costs and improve profits 69

5.3 Research conclusion 69

5.4 Recommendations 70

5.5 Further areas of study 70

References 77

xi

LIST OF TABLES

SECTION DESCRIPTION PAGE

1 Relationship of profits to costs 2

3.1 Sample size 29

4.1 Respondents from questionnaires and interviews 36

xii

LIST OF FIGURES

SECTION DESCRIPTION PAGE

Fig 4.1 Gender 37

Fig 4.2 Period of employment 38

Fig 4.3 Department 39

Fig 4.4 Experiencing rising costs 40

Fig 4.5 Challenges faced by the retail sector 41

Fig 4.6 Comparison of impacts to performance 43

Fig 4.7 Is cost control and cost reduction a necessity 46

Fig 4.8 Factors to consider in a cost reduction program 47

Fig 4.9 Comparison of the methods 50

Fig 4.10 Cost reduction an effective way of minimizing costs 52

xiii

LIST OF APPENDICES

SECTION DESCRIPTION

Appendix 1 Regression data set

Appendix A Letter of introduction

Appendix B Questionnaire

Appendix C Interview guide

1

CHAPTER 1

1.0 INTRODUCTION

The aim of this chapter , is to highlight the reasons for undertaking this research study and

to give evidence why this research is essential by giving the background of the study,

the motivation which is the problem statement , research objective ,delimitation , limitation

of study , significance of study , assumptions , research questions and definition of terms.

1.1 BACKGROUND OF STUDY

Parker et al (2011) points out that enterprises are always seeking to cut costs and

optimize resource utilization. In the same vein ,Rutsito (2014) cites out that , in this harsh

Zimbabwe’s economic environment ,the survival of any business is based on maximizing

profits while minimizing costs. Therefore the need to strategically reduce costs is more

compelling than ever .

Continuously rising costs are a problem in the furniture retail industry as evidenced by

the CEO of TN Harlequin Mr. T Nyambirai when he alluded that his organization was

facing the problem of rising operational costs and reduced revenue (Kadzere ,2014) .Mr.

Hungwe the management accountant of Colouresell Furnitures echoed the same for the

furniture company when he indicated that escalating costs have been experienced for the

past four years (Management Accounts meeting minutes ,2015). The following table from

Colouresell Furnitures management accounts reports shows how costs are increasing

while profits are declining:

2

Table 1: Relationship of profit to costs

Source :Management Accounts Report January (2015)

From the above table it can be clearly seen that the total costs are increasing from

18% ,27% and 36% in 2011-2014 respectively . With the evidence above , the operations

and admin costs contributed a greater percentage towards the rising of total costs posting

37% increase in 2014 trading period thereby causing reported profits for 2014 to

decrease by $1 409 057.74 compared to 2013 profit .A close analysis revealed the

following breakdown of expenses which were advertising ,fuel ,maintenance and repairs

,telephone costs which are contributing a greater percentage towards the rise in both

operational and selling costs (Financial Accountant report ,2015)

The Managing Director Mr. T Mharadze cited that , despite the fact that Colouresell

Furnitures has increased its market share , the rate at which the costs are rising as

compared to the rate at which profits are declining need to be looked into as this is

affecting the organization’s performance. This was due to the fact that Colouresell

deteriorated its profits by 63% in 2014 and also in 2013 their profits decreased by 27%

whilst in 2012 they only reduced by 3%.

2011 % change 2012 % change 2013 % change 2014

Gross profit 4 191 217.17 3% 4 323 523.92 -8% 3 959 607.65 -12% 3 498 734.12

Total Costs (1 032 520.78) 18% (1 259 618.91) 27% (1 722 278.54) 36% (2 670 462.75)

Selling & Distr costs 411 879.47 20% 514 849.34 24% 679 601.13 33% 1 012 605.68

Opera & Admin costs 620 641.31 16% 744 769.57 29% 1 042 677.41 37% 1 657 857.07

Retained profit 3 158 696.39 -3% 3 063 905.01 -27% 2 237 329.11 -63% 828 271.37

3

To this end ,authoritative scholars have written about the analysis of cost containment

and cost reduction strategies on rising operational manufacturing costs (Osadi et al

:2010),Pittman et al (2013),ludy (2010) , Keller (2010) and Bragg (2010)..In this regard ,the

researcher tries to close the gap between just analyzing rising costs, costs control , cost

reduction strategies from a manufacturing sector point of view and bring new information

on the impact of rising operational costs and the strategic implementation of cost

reduction strategies from a retail sector perspective .

1.2 STATEMENT OF THE PROBLEM.

Colouresell Furnitures profits have significantly reduced to unacceptable level for the past

four years due to continuous increase in its total costs. Therefore ,this has led the

researcher to investigate how strategically can Colouresell implement cost reduction tools

without affecting its operational structure.

1.3.1 MAIN RESEARCH QUESTION

What cost reduction strategies can Colouresell employ to control costs.

1.3.1 SUB RESEARCH QUESTIONS

What are the challenges faced in the retail industry

What effects can the rise of costs have on the operations of the organization

What factors should Colouresell consider in initiating cost reduction program

What other forms or ways can Colouresell Furnitures use to minimize its costs

1.4 RESEARCH OBJECTIVES

To investigate the challenges faced in the retail industry

To investigate the impact of rising costs on organization performance

4

To establish an effective cost reduction initiative program

To establish methods of reducing costs and improve profits.

1.5 ASSUMPTIONS OF THE STUDY

Continued use of the multi-currency system

No changes made to current operational organization structure

1.6 SIGNIFICANCE OF STUDY

1.6.1 To the organization

The study will help Colouresell Furnitures to comprehend the effects of high

operational costs on retained profits .In the same vein , the study will also help

Colouresell Furnitures to acquire other ways of reducing its total costs.

1.6.2 To the researcher

The research is of paramount importance as it will enable the researcher to gain more

skills in research methodology . The research will also add more aspects on theoretical

and practical appreciation on the relevance of cost control and reduction towards

achieving maximum profits .

1.6.3 To the University

The research under study will provide the university with reference for future studies

under the same research area .

5

1.7 LIMITATION OF STUDY

Lack of enough financial resources on the part of the researcher will act as a barrier

on the scope that will be covered by the research. However , the researcher has managed

to liaise with the company under study to receive any information required through the

use of email. On top of that , the company also agreed that the researcher can print his

copies using company printer at the nearest branch to him for the purpose of reducing

costs.

1.8 DELIMITATION OF STUDY

The study will be based on Colouresell Furnitures .

The study will only focus on analyzing the impact of rising costs on Colouresell

Furnitures performance and consequently reducing these costs

Information which will be used in the study will be sourced from Colouresell

Furnitures `s head office and the branches .

The information that will be used is from 2011 - 2014 trading periods.

1.9 DEFINITION OF TERMS

COST –Is any monetary value given up to obtain a good or a service .

COST DRIVER –Is any activity that causes the cost to occur. In other words ,a

cost driver is a catalyst that triggers a cost to happen.

COST CONTROL –This is a management tool aimed at improving and reducing the

occurrence of costs in the production of income .

6

COST REDUCTION - This is a management technique employed to scale down

occurrence of expenditure

1.10 SUMMARY

This chapter tried to introduce the story behind by first highlighting the problem being

faced by the company through the background of study. The chapter later on gave the

problem statement ,main research question ,sub research questions ,objectives and the

assumption of study .The following chapter will now look at the relevant literature of the

subject under study.

7

CHAPTER TWO :LITERATURE REVIEW

2.0 INTRODUCTION

The aim of this chapter is to highlight the literature content that has been cited by

scholars with regard to analyzing the impact of rising operational costs on organization

performance .To this end , the chapter will focus on answering the research objectives as

highlighted in chapter one in their respective sequence.

2.1 Challenges Faced by the retail industry.

The retail industry like any sector in an economy has challenges which hinder the sector

from performing well. Among the many problems experienced by the industry, the

following list will be discussed which are :competition, inefficient supply chain ,changing

customer behavior and lack infrastructure and logistics.

2.1.1Competion

Ndife (2014) mentioned that one of the problems facing the industry is stiff competition

from both new players and existing players. The scholar further went on to cite that due

to increased competition within the industry, this had led many organizations to report

low profit margins since there is a split in the market share. According to E-commerce

report (2011) they point out that the negative effects of competition in the retail

industry were that they force many organizations to further reduce their prices off which

the retail industry naturally has the lowest mark ups .Nevertheless ,their low mark ups are

further reduced by stiff competition in the industry thereby making retailers report low

financial performance.

8

However ,Fung Business Intelligence Center(2013) argue that competition in any industry

is of great importance as it enables all players in that industry to improve their

operations as well as their value to customers. Guest (2012) in his article 4 reasons why

competition can benefit your business cite that stiff competition also enables

organizations to be innovative and provide differentiated products and services so that

the organization always stays ahead of its competitors.

2.1.2Inefficient supply chain

Chan (2010) assert that one of the major problems in the retail sector is to manage its

distribution channel. The author pointed that the retail industry is faced with this

problem mainly because of many suppliers who supply different products Nevertheless

Shojaie and Nasirian(2015) they assert that ,for an organization to remain sustainable in

this increasing harsh economic environment is to be able to provide its product to

customers in a timely manner. According to Chan (2010) a traditional way of distribution

of goods is from one supplier and straight to the warehouse or customer. Tammela and

Canen(2010) echoed the same by citing that the furniture retail industry is experiencing

inefficient supply chain problems because they have long delivery times and unrealistic

schedules.

However ,Kama and Kumar(2014) and Shjaie and Nasirian(2015) argue that inefficient

supply chain problems faced by the retail sector is due to the fact that they lack sense

of agency when executing their duties and also when they plan their delivery routes. The

same view was supported by Berry(2011) by citing that organizations who want to be

9

valued as the best in the industry would and also who want to build a strong name will

put much emphasis and effort on being time conscious.

2.1.3 Changing customer behavior

According to Raham(2014) he asserts that the retail industry is in the crisis of facing

changing customer buying patterns and behavior. According to the scholar ,the 21st

century customer is expecting an integrated experience in all respects from the retailer.

Henceforth ,if the retailer fails to provide this integrated experience ,then ,the retailer will

become irrelevant. Schiffman and Kanuk (2010) had the opinion that the reason why

consumers are changing their behavior especially in the retail sector was due to the fact

that they have perfect knowledge in all respects. Therefore they are able to make informed

decisions well before they commit their hard earned cash .Ansley (2014) pointed out that

customers are becoming more and more difficult to define, reach or even put into groups

because of value systems based on cost benefit analysis.

However ,Uddin (2012) and Berry (2011) argued that the reason why most retailers are

facing the challenge of changing customer behavior is that this industry lacks research on

customer preference and perceptions. According to the scholars, this is why the retail

industry claims that customers are changing their behavior off which it’s their lack of

knowledge towards their customer base. According to Mohani (2013) he also asserts that

lack of adequate data on the customer spending patterns will prevent the industry from

growing.

10

2.1.4Advertising

Neha (2013) in his article “Retail marketing in the new millennium” asserts that if retail

companies aspire to create a good image in the face of the customer ,they have put

much emphasis on advertising their products as well as their corporate image. The

scholars argument was that due to stiff competition in the industry ,the other way to

lure customers is advertise extensively. In support of that view ,the Retail forum for

sustainability(2010) also assert that advertising creates good communication between the

organization and its customers. Thus it enables the organization to clearly define what it

is capable of supplying to its customers. Nevertheless , Morgan(2014) argue that,

traditional advertising is becoming a problem in the retail sector as it is failing to bring

back the anticipated positive results.

However ,Kristie (2014) argue that despite the fact that advertising creates good image

and good communication with the customer, they point out that advertising does not

guarantee positive results to the organizing .Their assertion was that ,the magnitude and

the way the customer perceives the organization is not measurable and hence its link to

reported profits is also not revealed. Randall and David (2011) then point out that the

organization cannot have control over such a problem (variable) henceforth ,the effects of

advertising can be recognized in the long run.

2.2Impact of rising costs on organization performance

Bragg(2010) asserts that the purpose of any organization to engage into any commercial

activities is to make sure that they yield positive results at the end of each trading

period. According to the author , every organization strives to achieve shareholders wealth

11

maximization. To this end , Hongren (2010) ,alludes that organizational performance is

measured by analyzing three elements which are profit , growth and revenues. Thus ,if an

organization fails to attain maximum profits hence they have failed to perform and also

if an organization fails to expand its operation over a given period of time ,they have

failed to perform and he also alluded that if an organization fails to collect maximum

revenues from its customers then they have failed to perform.

Siyanbola and Raji (2013) support the views cited by Bragg(2010) and Hongren(2010) by

pointing out that cost and profitability in business activities constitute a greater portion

of what determines the financial position of the entity. This is because management is

much interested in business performance which is profitability and higher revenues

Henceforth , the need to yield high revenues and consequently high profits will facilitate

the increase in production capacity especially in a manufacturing company which will in

turn facilitate an increase in operational cost. A detailed review of profit ,growth and

revenues as they are directly affected by the rise of operational costs is as follows:

2.2.1 Reduced Profits

As alluded earlier by Hongren (2010) , Ludy (2010) points out that the major reason for

the existence of any organization is to maximize profits. Thus ,if an organization incurs

or experience high operational costs then this will erode the end result which is the

profit. Therefore all companies in any industry should put a close eye on their operating

expenditures since these expenses have a significant effect on their reported profits.

Bragg(2010) supports the view cited by Ludy(2010) pointing out that profit maximization

is the key element and should be the first priority at an organizations agenda. The

12

scholars argument was that , as long as profit making organizations fail to prioritize

profit maximization then that organization would have missed the mark of why they are

operating since they have failed to achieve their major objective. Furthermore he cites that

high operational costs have a direct bearing on profitability. Henceforth ,every

organization should try to put maximum effort in trying to reduce and also control its

spending behavior as this directly shrinks company profits and eventually performance.

However ,Siyanbola and Raji (2013) concluded that as management aspires to enjoy high

profits from its operational activities , it should bear in mind that this will trigger an

increase in its operational costs therefore cost control and reduction methods should be

in place to ensure that they have value for shareholders investments.

2.2.2 Failure to expand operations (Growth)

Bragg(2011) assert that ,as the organization grows , management should expect their

operating figures to rise as they will be aligning to the expansion of the organization.

Thus what is important is to monitor the increase of these operational costs as they have

an impact on the organizations performance. The scholar further points out that that an

increase in operational costs should not be avoided rather management should control

their spending behavior as this has a direct effect on the growth of organization.

However ,Shah and Malik(2011) and Hongren (2010) points out that growth of the

organization is in different dimensions. The scholar cited that growth of an organization

can be by way of increasing the market share ,an increase in the purchase of assets ,an

increase in production or even investment in capital assets. According to the author , an

increase in market share will facilitate an increase in operating expenditure like

13

advertising and high rentals especially if the organization wants to increase its market

share by way of opening up new branches. The scholar alluded that as the organization

experiences high operating costs then ,chances are high that the organization will fail to

expand their operating structure since much of the resources will be channeled towards

the expenses .Henceforth ,Bragg (2010) then cite that ,for the organization to be able to

expand its operating activities it should bear in mind that they should control and

contain operating costs.

Ludy (2010) supports the view asserted by Bragg (2010) and Hongren (2010) by pointing

out that an increase in operational costs will usually dilute the cash flow of the

organization .Therefore as the organization has insufficient funds then expansion of the

operating activities will not be possible. The scholar cited an example of purchase of

assets by the organization by pointing out that this type of expansion will not be

undertaken if the organization has insufficient funds. The author gave a remark that an

increase in operating costs should be controlled as this affects growth of the

organization.

2.2.3Declining Revenues

According to Ludy (2010) , before an organization experiences profit or rather growth

,they have to first collect enough revenues from their customers. However , revenues do

not emerge to the organization without a corresponding incurrence of expenditure .The

author argues that for the organization to enjoy economies of scale due to growth , they

have to post a reasonable revenue figure .Nevertheless ,operational costs have to be

incurred in order to make available for sale the products or goods or services to

14

customers .The notion asserted by Bragg(2011) and Hongren (2010) that incurring expenses

in the production of income is not a problem but what is important is to monitor their

spending patterns since operational costs have a direct impact to the organizations

performance .

Bragg (2011) points out that the increase in operational costs can significantly affect the

revenue figure through product pricing. His notion was that as the operational cost

increase , management will be forced to sale their products at a much higher price as

they will be trying to recover their cost of production or rather their cost of making the

goods available to their selling point .Therefore ,the resultant price of the product will be

high which might cause customers to reduce their spending towards the purchase of the

product thereby reducing the revenue figure .The same notion was cited by Siyanbola and

Raji (2013) that the increase of operational costs will be felt or shown by the

organization’s pricing of products as the organization will pass on the resultant effect to

the customer and thereby severely contributing to the decline in sales value since

customers will tend to purchases less of the products. Henceforth ,operational costs should

be managed with care as they are linked to the performance of the entity.

However Kotler(2009) and Ogbadu(2009) and argue that declining revenues are not only

caused by increasing operating costs rather there are other factors which can also hinder

the revenue of an organization like poor marketing strategies .According to the authors

,poor marketing strategies can significantly affect an organizations revenue.

15

2.3 An effective cost reduction initiative program

According to Moorhouse (2011) they point out that cost reduction is an extension of the

daily activities performed within the organization like operational activities and the

carrying out of financial or human resources activities. In their view ,cost reduction needs

a technique or approach which will be fully monitored and managed in accordance with

organizational strategy. Henceforth, it requires a positive ,well though plan and an

argument that brings the necessity for change, the desire for change and the capability to

change. The following elements are of significant to the organization for an effective cost

reduction initiative program to be a success which are : team work ,identifying and ranking

of current costs ,evaluating the importance of each cost item ,monitoring and

implementing action plans and the risk involved (Berk ,2010).

2.3.1Team work

Keller(2010) echoed that the key element for an effective cost reduction program is

cooperation from each and every individual within the organization. His assertion was that

cost control and cost reduction opportunities are everywhere within the organization,

henceforth, you will need full assistance from people in each and every department.

Rothberg (2012) shares the same view asserted by Keller (2010) by citing that

individualism in a cost reduction program is a dead end. His argument was that most

employees within the organization will tend to resist the initiative. Therefore team work

with other employees is of paramount importance. It is important to ensure that all team

members in the cost reduction initiative program should be dedicated ,passionate and have

the desire to embark on the program.(Keller,2010)

16

However Kirli and Gumus (2011) had the opinion that for the cost reduction program

to be a successes ,there is need for support from top management .Their argument was

that as long as there is full inclusion of top management ,many employees will tend to

put effort ,focus and assistance because of the view that top management has authority

and also that it shows serious business .Hongren (2010) points out that despite the

inclusion of top management and other employees, communication between the two

functions is a great medicine. According to the author , team work will not be a success

if there is poor flow of communication.

2.3.2 Identify and rank current costs

The notion passed by Keller (2010) that team work is a key element in cost reduction is

evident when the need to identify and rank cost arises. Berk (2010) assert that the

process of identifying and ranking of current costs requires the support of team members

since they will help each other to gather data from all targeted areas of cost reduction.

The scholar then points out that ,it is easy to classify costs as large and small .His

argument was that ,the classification will indicate that large costs have high opportunities

for cost reduction whilst small costs will indicate that they have the opportunity to

reduce costs but at slower rate as compared to large costs.

Osadi and Okpako (2010) cite that the identification and ranking of cost should be done

through overhead categories and also by comparing department by department for the

whole organization. This type of identification usually works well for a manufacturing

firm .Nevertheless ,regardless of the method used to identify and rank costs ,Bragg (2010)

assert that the largest group or overhead category of cost should be targeted first since

17

these pose a threat to the cost structure. The scholar gave an example of materials in a

manufacturing firm by citing that if this category of overhead cost is large then the team

should start to focus on that cost and brainstorm on how to reduce the cost without

affecting the cost structure or operational structure of the organization. However Ludy

(2010) and Hongren (2010) argue that there should be strict and careful identification and

ranking of costs since a wrong choice of costs may hinder the cost structure of the

organization.

2.3.3 Evaluate the importance of each cost item

Berk (2010) alludes that ,after the organization has identified and ranked its current costs,

the need to evaluate the magnitude of each cost item then arises. His notion was that, the

organization should not jump to scale down the costs soon after they have identified that

the cost item is affecting the performance of the organization rather they should assess

their importance to the organization. Therefore ,Siyanbola (2013) then points out that ,the

best way to evaluate the importance of each cost item is done on a department by

department bases .The scholar asserted that this method is effective since each

department understands the necessity of their costs and how best can the reduction of

the cost item be done.

Berk (2010) supports the view asserted by Siyanbola (2013) but further went on to cite

that the departments should classify each cost item by inserting them into three priority

levels which are high ,medium and low. The scholar pointed out that the organization

should put a close eye on the middle and low cost items although high priority cost

item indicates that the cost item is important to the operations of the organization ,the

18

cost item should be monitored to avoid unnecessary increase of expenditure towards the

cost item .Thus ,high priority level should not be eliminated rather they indicate that

further analysis is required .

However Pittmen and Hawk (2013)) and Shah and Malik(2011) argue that the weakness of

this stage is that ,other departments might indicate that their cost is important of which

on the ground it’s not important. The scholars gave examples of costs like travel

expenses which are at risk of being misused by company personnel at the expense of

the organization.

2.3.4 Monitoring and implementing action plan

Monitoring and implementing the action plan of cost reduction is a critical area where

there is high probability of facing resistance from other employees(Keller ,2010).

Nevertheless Hongren (2010) and McConnick(2010) suggest that in order for the action

plans to be successfully implemented ,there is need to educate employees on why the

chosen cost is being reduced. The scholars argument was that ,once the employees are

given an explanation for the need to scale down the cost ,then cost reduction action plan

will be a success. Keller (2010) gave an opinion that there should be a person chosen

from each department who will lead the selected action plan for the purposes of

monitoring the implementation stage of the plan.

The scholar went on to cited that all action plans should be documented and that the

person chosen should give feedback to the management as to highlight the progress of

the action plan. Berk (2010) points out that the responsibility to implement and monitor

the action plan should not be done by an individual or the cost reduction team rather

19

these two groups of people are only enzymes who are there to facilitate the action plans

hence everyone within the organization should be fully involved in the program.

2.3.5 Risk involved

The management must bear in mind that cost reduction is a difficult and a high risk area

that when carried out haphazardly ,it can potentially affect the organizations goals and

objectivity(Rothberg ,2012).Henceforth, once the organization determines that cost reduction

is inevitable ,care should be considered to the approach and as well as the design of the

cost reduction methods(Berk ,2010).The scholar further cited that ,with regard to

approach ,sentiments like let’s do something now should be avoided since they act as a

cohesive way of doing things. On the other hand ,when it comes to the design ,an

overload of initiatives underway should be avoided as this poses a risk of failure.

However ,Osadi and Okpako (2010) point out that the organization should consider

checking were the concept of cost reduction has been done by other companies and if it

is the case that the concept was carried out then ,the risk will be low. In the same vein ,

the scholar then cite that if the concept was not done then the risk factor becomes high.

Henceforth ,the organization should carefully determine all possible areas of risk and take

initiatives to control these risks.

2.4 Methods of reducing costs and improve profits.

According to Rothberg (2012) , he alludes that , with the harsh global economic

environment , stiff competition and consequently declining profit margins and revenues for

many companies ,the first response of management is to cut costs to keep their

businesses afloat. In this regard ,many companies streamline their operations ,tighten their

20

procedures and learned how to do more with less thereby creating leaner and more

efficient organizations. On top of that , Siyanbola and Raji (2013) support the view of

Rothberg (2012) by citing that cost control is of paramount significance to the business

world and that ignorance of which will detrimentally affect the resultant reported

profits of any organization.

However , Ndife (2014) states that , the reasons behind cost reduction is that it leads to

more efficient use of raw materials ,maximization of profits ,successful operation and

growth of businesses entity and efficiency in overall or general performance of the

business. Rothberg (2012) then asserted that , unfortunately same companies implement

cost cutting initiatives haphazardly that do not take into account potentially damaging

long-term impacts .To this end ,undisciplined ,across the board cost cutting can severely

damage a company’s foundation and undercut its strategic advantages ,limiting its ability

to take advantage of new opportunities to add market share and boost profits during an

economic rebound. Budgeting ,Activity Based Costing, Benchmarking, Work study and

Target Costing are some of the methods for cost control and cost reduction.

2.4.1Budgeting

According to Hongren (2010) a budget is a tool that aids managers in both planning and

control functions. Nevertheless, it is not the budget that can reach the objective of cost

control and reduction rather it is the behavior of the manager. Siyanbola and Raji (2013)

assert that a budget sets the standard to indicate the level of activity from each

responsible persons and decision unit and the amount of resources that a responsible

party should use in achieving that level of activity .Therefore a budget establishes the

21

responsibility center ,delegates the concomitant responsibility and determines the decision

points within an organization.

Hongren (2010) further asserts that ,if the actual figures are different from the budget

then thorough analysis needs to be made of the causes, thus ,if the differences are caused

due to negligence or any other negative behavior , corrective action need to be taken

thereby controlling costs and consequently reducing them to an acceptable level. However

Adeninji (2011) argues that the use a budget to control and reduce costs may be biased

due to the fact that the variances discovered by the budget are just as frequently as due

to changing circumstances and poor forecasting of the management. Olabisi et al (2012)

also cited that budgets are prepared using the existing organizational structures which

may be inappropriate for the current condition. The scholar further pointed out that the

focus on the budget may also hinder the organization to be flexible as it will be clued

around the budget thereby failing to adapt to changes in business environment.

2.4.2Activity Based Costing

An ABC system is a system that first accumulates overhead costs for each of the

activities of the area being costed and then assign the costs to activities , products ,

services or other objects that require that activity( Hongren , 2010).He further says that

ABM uses the output of ABC to aid and improve operational control of an organization.

To this end both ABC and ABM are important cost control methods .The major concept

behind ABC is that it traces all direct costs to products and services and also the other

concept is that its links all indirect costs to products and services through cost drivers

and cost activities (Bragg , 2010).

22

According to Hongren (2010) and Alizera (2011),the cite that the most important aspect

of ABC and ABM is that they separate value adding activities from non-value adding

activities thereby eliminating unnecessary incurrence of costs towards the production of

the product. The scholars cited examples of non-adding value activities such as

transferring of incomplete products from one side of the plant and the other and also the

handling of stock. Their argument was that ,these activities can be easily be eliminated

by for example changing plant layout since these activities are not adding any value to

the customer .To this end it then enables the organization to control costs and reduce

unnecessary expenditure simultaneously.

Bragg (2010) then points the fact that if ABC and ABM are used simultaneously , these

concepts help the organization to understand product costing , profitability from

customers ,the costs incurred by organization processes and eventually how to bring new

methods of undertaking theses process. To this end ,when the organization manages to

improve the process then it would have achieved the idea of cost reduction. The

concepts of ABC and AMB provide the organization with accurate information ,therefore

this information can be used by management for making the three most important

decisions which are tactical ,strategic and operational decision making. In this regard both

ABC and ABM are important tools for cost control and cost reduction (Dandango ,2014).

However Oluwagbemiga et al(2014) and Bastl (2010) both argue that the problem of

ABC is in the implementation phase which is complex and requires proper identification

of activities and cost drivers .Adeninji(2011) support this view by citing that there is need

to guard against the notion that a selected cost driver provides a comprehensive basis

for controlling costs. Henceforth ,organizations should be careful when using the concept

23

of ABC in controlling and reducing costs. Dandango et al (2014) further went on cite

that the other problem with ABC is that the concept is un able to distinguish between

value adding activities and non-value activities. Henceforth management should bear care

when using this concept.

2.3.3Benchmarking

According to Barbole et al (2013) bench marking is the process of taking a comparison

or reference of your organizations activities against those of competitors in the industry.

The scholars asserted that usually the organization makes a comparison with the best

company in the industry to ensure that their operating activities are in conformity with

its major competitor. Ljubo et al (2011) then asserts that bench marking is a process of

identifying ,adapting and understanding best practice with those of the superior along

cost effectiveness. He further pointed out that the major thrust of bench marking is to

borrow ideas and the way of doing business and then later on adapting those strategies

for the purpose of gaining competitive advantage.

Murad (2014) cited that bench marking can be done in four ways which are internal

bench marking ,competitive bench marking ,noncompetitive bench marking and world class

bench marking. Nevertheless, Hongren (2010) points out that of the four ways of bench

marking ,internal bench marking was the simplest of them all because it simply

comparers the internal operations of the organization for example , carrying out a survey

of a branch to branch cost comparison or division to division comparison which

undertake similar activities.

24

Therefore by so doing this helps management to raise an alarm if the other branch is

managing to operate using low costs whilst the other is operating with high costs. He

also highlighted that the difference between competitive and noncompetitive benchmarking

was that noncompetitive involves bringing new methods of operation which can be

adapted within the organization without any comparison whilst competitive benchmarking

involves direct comparison with the competitors and then adapt those strategies into the

organizations processes. Hongren (2010) and Olabisi et al (2012) then concluded that

bench marking enables an organization to set targets and its operating activities based on

an outside and reality information which makes the organization to operate within set

standards in the industry.

However Mohamed(2013) argued that ,it is difficult to benchmark all processes within the

organization henceforth not all areas benefit from benchmark. Soni and Kodali(2010) also

argued that benchmarking organizations might find it difficult to gather full information

from their competitors would not be willing to disclose their operations and that this

technique is an ongoing process which takes time to control costs and not an immediate

solution to the organization.

2.4.4Target costing

According to Barbole (2013) and Sani and Allahverdizadeh(2012) target costing refers to

the design of the product and the processes used to produce that product so that at the

end , the product can be produced at a cost that will enable the organization to enjoy

profits when the product is sold at a market estimated driven price. To this end , Alireza

and Mahdi (2012) then asserted that target costing has three stages before the product is

25

assigned a price. According to the scholars the first phase of target costing is to analyze

the market for the purposes of establishing the characteristics which the product must

possess and its highest selling price expected by the market. However this does not mean

that the organization will simply provide the product as required by the market rather

the organization has the knowledge required to produce the product. At this stage ,the

organization will usually involve supplier and customer relations in order to provide the

product at a reasonable price at a cost effective manner.

Barbole (2013) then goes on to highlight the second phase of target pricing by citing

that the organization will have to identify what activities the organization must embark

on in order to produce the product .Therefore .these activities are then casted and the

total cost is compared to what the market perceives as a reasonable price after

deducting its desired profit. In the event, Shah and Malik (2011) point out that the

allowable costs exceed the predicted costs , then the organization embarks on identifying

where costs can be reduced without scaling down the desired product attributes unless

the other attribute does not add value to the customer . To this end , the organization

would have managed to control its costs and consequently reducing its production costs.

However Sokefun and Oginni (2012) and Zengin and Ada (2010) argue that the major

thrust of target costing is to reduce costs through product design ,henceforth, the scholars

cites that this notion might hinder the product attributes as the organization will put

more emphasis on the reduction in the design of the product. Thus other attributes of the

product might be considered as unnecessary with the motive of reducing costs as a result

customers might not be no longer satisfied by the product as it has been altered. Bastl et

26

al(2010) had of the opinion that the problem with target costing is that it ignores the

elements of fixed costs as well as administrative costs in its calculation of product costs.

From the above literature on methods of cost control and reduction strategies, it can be

concluded that their major focus and thrust was on the manufacturing sector point view

of which ,this is not the only sector in existence in the business world rather there are

other sectors in operation like the retail sector which also need to control and minimize

their operating patterns.

2.5 Summary

The purpose of this chapter was to highlight what other scholars wrote concerning the

impact of rising operational costs on an organizations performance and consequently

reducing these costs. This was achieved by trying to follow research objectives as

outlined chapter

27

CHAPTER THREE: RESEARCH METHODOLOGY

3.0 INTRODUCTION

The reason of research methodology is to highlight the information pertaining to the

procedures employed in conducting the research .Hence forth ,it is of significance to

outline the sources and techniques used to gather and analyze data and also the reason

for their adoption. The chapter uncovered the following, research design ,population ,sample

size, data sources, research instruments ,validity and reliability, data analysis and

presentation. It then concluded with a summary at the end of the chapter.

3.1 Research design

Thyer (2010) assert that a research design is a significant tool or element of any research

process at which research design aims at outlining the plan in which the research is

going to be carried out. To this end ,it is important for the researcher to specify the type

of research design to be employed. Despite the various types of research designs, the

researcher chose to adopt descriptive research design.

3.1.1Descriptive research design (survey method)

The researcher chose to adopt descriptive research design since its purpose is to gather

data of conditions prevailing currently as alluded by Penwarden (2014) in his article

Descriptive research design :Defining your respondents and drawing conclusions. Further

,the researcher also adopted this design method as it enabled him to use both

quantitative and qualitative data in gathering information about the population being

studied. On the other hand the researcher adopted this design as it is more conclusive in

28

nature hence can be used for statistical inference on a target population through data

analysis(Selman ,2014).In the same vein, this design approach also helped the researcher

to place reliance on a variety of data .The researcher adopted the survey method as it

allowed him to use both interview and questionnaires thereby enabling him to describe

the responses given by respondents as pointed by Hale(2011)

3.2Population

Relethford (2013) postulate that a population is the totality of all features or cases under

investigation in a study . In other words, population is set of individuals at which the

researcher aims at gathering or making inferences. He also further asserts that

population for research purposes is the group of people which the researcher aims at

collecting information from them. In this regard, the researchers target population is

Executive management, Middle management, Finance and Accounts clerks, Branch Heads

and Branch sales representatives. The target population of the researcher is mainly on

Colouresell Furnitures Heard Office and part of its Branches (Kadoma).To this end the

researcher chose to use a target population of 48 respondents.

3.3 Sampling and Sample size.

Hayes(2011) asserts that a sample is a representation of a particular target population.

Thus, a sample is taken from the target population henceforth, the two are not the same.

He further points out that, a sample which is a selection from the target population is

used by the researcher as bases of information. These scholar assert that, in order to get

accurate information and data from that sample selected ,the researcher should attain a

29

sample size which is greater than 30 . The researcher chose to adopt a sample size of 45

which 83% of the targeted population in order to attain accurate results.

3.4 Sampling Technique

Thyre(2010) points out that any researcher should choose a sampling method that will

produce reasonable results and also that gives the researcher value for the information

gathered. The researcher opted for probabilistic sampling method that creates a room for making

inferential statistics. The researcher adopted stratified random sampling since this method

reduces biasness and that it eliminates focusing on a single group of the population due

to it’s across the board distribution(allocative efficiency)(Amough et al ,2013).Stratified

random sampling applies in a situation where by the strata’s themselves are heterogeneous but

the elements in each strata are homogeneous. Further ,the researcher chose stratified random

sampling since this method enables the use of applying statistical models like regression

analysis since it is based on randomness(Amogh et al ,2013)

Table 3.1 Sample size

Category of respondents Target

population

Sample

values

Sample

Percentage

Executive management 6 5 83%

Middle management 13 11 83%

Finance and Accounts clerks 18 15 83%

Branch Heads 3 3 83%

Branch sales representative 8 7 83%

Total 48 40 83%

30

3.5 Data sources

There are basically two types of data sources of information which are primary data

sources and secondary data sources as postulated by Amogh et al 2013 in his article Data

Collection -Primary and Secondary data sources.

3.5.1Primary data sources

Donald and Pamela(2010) defines a primary data sources as a method of collecting data

by the researcher himself for the purposes of the research. In other words, primary data

source of information is method of collecting data which never was gathered before for

any particular study. Henceforth, this source of data emphasizes originality. The researcher

chose to use primary data as a method of collecting data as it allowed him to collect

data which is specific to the research under study(Jenniferc ,2014).Further ,this source of

data enabled the researcher to use information which was un altered by human beings

thereby ensuring originality of data. The researcher used questionnaires and structured

interviews to collect as primary data sources.

3.5.2 Secondary data sources

Kumar (2013) points out that secondary data source of information is information which

is collected from existing records which were previously used for other purposes.

Secondary data source include financial statements reports, newspaper, articles , journals ,

books .Thus secondary data maybe derived from both internal information and external

information concerning the organization or topic under study. In this research, Coloursell

Furnitures meeting minutes, financial statements and newspaper articles , journals and

other documentaries concerning the furniture retail industry were used.

31

Secondary data sources helped the researcher to gather data in a timely manner and also

in a less costly manner(Enga14 finish institution research paper ,2013). This was because

the information so required by the researcher was readily available. The other reason why

the researcher chose to use secondary data source was to bring out information which

other people discovered concerning the research under study(Amogh,2013). Further , for the

purposes of assessing relationships of variables(regression analysis),the researcher used

secondary data.

3.6 Research Instruments

For the purposes of this study, the researcher adopted the use of interviews and

questionnaire to collect data which is relevant to the study.

3.6.1 Interviews

Thyre(2010) points out that an interview involves both oral and written presentation of

information and responses. Thus it is a session in which a series of questions are asked

in order to inquire about specific information from a person. According to the scholar, in

descriptive research design, communication with respondents is essential. The researcher

used this method in order to reinforce the questionnaires used. Due to top managements

unavailability and their strict schedules, the researcher adopted interviews mainly for the

top management. However interviews with other employees and respondents were also

conducted. Furthermore ,due to the flexibility of this instrument for example telephone

interviews were made possible to conduct (Ludy,2012) .In line with that ,the researcher

also chose to use this instrument because of its instant feedback of information . The

instrument also enabled the researcher to acquire in-depth information since the researcher

32

was able to further ask questions in order to get a clear understanding. Interviews also

enabled the researcher to assess the level of knowledge the respondent have, capture

verbal and nonverbal expressions as alluded by Susan (2014) in his article Advantages

and Disadvantages of Face to Face Data Collection.

3.6.2 Questionnaires

Kumar(2011) postulates that questionnaires are tools through which people are asked to

respond to a set of questions in a predetermined manner. Thus questionnaires are a series

of questions to be asked to the sample selected to obtain useful information about a

given study area. The researcher adopted questionnaires since they are an inexpensive

method to collect data from a potentially large number of respondents. furthermore, the

use of questionnaires enables respondents to have enough time to give a well thought at

answering the questions and that it could be used on a scattered sample size as echoed

by Long street et al (2012).Questionnaires should make use of both open ended questions

and closed ended questions. The use of closed questions were essential as they enabled

the respondents to have a guideline without wasting much of the time as postulated by

Kumar (2011).

3.7 Validity

Validity is the degree to which an instrument of research measures what is supposed to

measure(Donald and Pamela,2010).Thus an effective instrument needs to measure what it

intends to focus on in order to attain its objectives .The questionnaires were matched to the

interview questions and carefully worded.

33

3.8 Reliability

Reliability refers to the ability to obtain consistent results when the research instrument

chosen are reused(Janet ,2011). Some of the factors that determine reliability are sample

size, instruments used for data gathering and level of understanding of the respondents.

Attention was be given to question construction ,wording, choice of sample and testing

the instrument through the usage of statistical models.

3.9 Regression model(multiple regression model)

The researcher adopted to employ multiple regression analysis in order to test the

relationship which exists between rising of operating costs and profitability as alluded by

Richa (2014) in his article “ Regression Analysis :find the best fit for your statistical

model”. The researcher seeks to find the effect which exist between one variable and

another in this study for example ,what happens to profitability when there is a change

in operating costs. The dependent variable will be the (profit) whilst the independent

variables will be (administration costs, telephone charges, fuel costs and repairs and

maintenance).

The following equation was used:

Y = β0 + β1X1+β2X2+β3X3+ +e

Where :

Y is profit

β0 is constant term

34

β1 - β 4 are regression coefficients

X1 is telephone cost

X2 is repairs and maintenance

X3 is fuel costs

3.10 Data Analysis

The researcher used primary data and secondary data to analyze data. The Statistical

Package for Social Sciences(SPSS version 16) was used to correlate the relationship

between cost reduction of operating costs and the organizations performance from

financial statements of 2011-2014.The researcher chose this software package as it

enabled him to effectively manage data thereby analyzing it in an efficient manner as

alluded by Verma (2013) in his book titled Data Analysis in Management with SPSS

software.

3.11 Data Presentation

The data collected was presented in the form of tables, graphs and charts. The researcher

employed inferential statistics method that is correlation to quantity and analyze raw

data that allows for generalization and reasonable deductions for the research study to be

made based on the findings of the research. The researcher used the SPSS software

package to present data .This was because the package offers a wide range of options to

present data and also it offers better organization of output as postulated by Stumm

(2011) and Harri (2012).

35

3.12 Chapter summary

The chapter uncovered the research methodology ,research design ,population ,sample size

,research instruments ,data collection sources ,multiple regression model and data

presentation and analysis. The following chapter now unveils the analysis of research

findings.

36

CHAPTER : FOUR

DATA PRESENTATION AND ANALYSIS

4.0 INTRODUCTION

This chapter presented and analyzed data gathered through the use of questionnaires and

interviews . Statistical analysis was used to test the relationship which exits between

operating costs and profitability .The data gathered was presented in the form of tables

,charts and graphs . A full description of the data gathered now follows .

4.1 Survey Response Rate

Table : 4.1 Respondents from Questionnaires and Interviews

The researcher issued out thirty five (35) questionnaires and conducted five (5)

interviews. Of the 35 questionnaires , the researcher got a response of 34 questionnaires

whilst of the intended interviews , he managed to conduct all the 5 interviews .This

RESPONSE RATE FROM QUESTIONNAIRES AND INTERVIEWS CONDUCTED

Category of respondents Sample size Response from sample size Response Rate

Executive Management 5 5 100%

Middle Management 11 11 100%

Finance and Accounts Clerk 15 13 87%

Branch Heads 3 3 100%

Branch Sales Represantative 7 7 100%

Totals 40 39 98%

37

implies that ,the researcher managed to acquire a response rate of 98% from the survey

conducted .In this regard , this it is in support of what was cited by Wardle (2011) in

his article “What is an average survey response rate ” ? that a positive survey response

rate should be between 50% and 70% of the respondents .Therefore ,based on that

notion , the researcher managed to acquire a survey response rate which is well above

the anticipated rate thereby enabling him to gather data from required sample size .The

non-response rate of 2% was insignificant to disrupt the researcher to make reasonable

analysis and conclusions from the gathered data.

4.1.1 Gender Response

Figure 4.1 Gender

With the increase of gender awerenes in Zimbabwe ,the researcher sort to gather data

from a balanced gender population .According to the chart above ,it was evident that the

researcher managed to acquire information from almost a balanced sex.This is indicated

FEMALE 47% MALE

53%

GENDER

38

by a 53%(18/34) and 47%(16/34) from male and females respectively although there

was a slight difference.Nevertheless the objective was met to gather data from an even

population.

4.2 Level of Experience with Colouresell

Figure 4.2 Period of employment

According to the chart , it shows that 44%(15/34) have been with the entity for more

than 6years and above whilst 32% (11/34) have been with the entity between 3years-

5years and the 24% (8/34) have less than 2 years with the organization .Therefore , the

majority of the respondents 76%(44%+32%) have very strong relationship to CF thereby

ensuring that they possess enough and reasonable knowledge about the information

required by the researcher to make a reliable and valid research

24%

44%

32%

PERIOD OF EMPLOYMENT

Less than 2yrs

3yrs -5yrs

6yrs and above

39

4.3 Which Department Do you Fall in ?

Figure 4.3 Department

According to the bar graph above , it is evident that 27 (13+11+3) respondents possess

reasonable knowledge as the majority 13 came from fiancé and accounts clerk whilst the

other half came from middle management . This enabled the researcher to obtain

information which is valid and reliable.

13

3

7

11

0

2

4

6

8

10

12

14

Finance &Accounts clerk

Branch Heads Branch SalesRepresentitive

MiddleManagement

Department

Department

40

4.4 Is Coloursell Furnitures experiencing rising operational costs ?

Figure 4.4 Experiencing rising costs

From the above bar graph ,it is evident that CF is experiencing rising operational costs

in its trading operations. This is depicted by 79%((27/34) of the respondents who

strongly agreed that in deed the organization is experiencing rising costs. This response

is in line with what the CEO of TN Heliquen ,Mr. T Nyambirayi when he indicated

that the furniture retail industry is facing escalating operational costs whilst 18% of the

respondents also agree that the organization is having a challenge with its operation

costs. However 3% (1/34) of the respondents have the view that they are not sure

whether the organization is experiencing rising operational costs or not and also 0%(0/34)

cited that the company is not experiencing any rising operational costs. Therefore ,it can

be concluded that CF is actually facing rising operation costs. The percentage 3% and

0% are an insignificant number to oppose this conclusion.

StronglyAgree

AgreeUncertai

nDisagree

Experiencing rising costs 79% 18% 3% 0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

% o

f r

esp

on

de

nts

Experiencing rising costs

41

4.5 Challenges Faced by the retail industry

Figure 4.5 Challenges faced by the retail industry

According to the bar graph above , it is clear that with competition 12 strongly agree ,

13 agree , 4 were uncertain , 2 disagree whilst 3 strongly disagree . The 25 (12+13)

respondents who are in support of competition as a challenge are in line with E-

commerce (2011) position that competition is a challenge in the industry .This is also

evidenced by a small number which disregards competition as a challenge .Inefficient

supply chain was supported by 3 who strongly agree whilst 16 agree .Nevertheless 6

respondents were uncertain were as 0 respondents disagree whilst 9 strongly disagree .

The 0 and 9 respondents who disagree are in line with what was cited by Berry (2011)

who cited that organizations who want to be valued as the best in the industry would be

0

2

4

6

8

10

12

14

16

18

Strongly Agree

Agree

Uncertain

Disagree

Strongly Disagree

42

put much emphasis on being time conscious as this problem depends with the

organizations way of doing business. The respondents who admitted that inefficient

supply chain is a challenge were in line with Tammela and Canen (2010).

Changing customer behavior recorded the highest response as 17 strongly agree and 9

agree were as 3 were uncertain and 2 disagree whilst 3 strongly disagree . The

summation 26(17+9) are positive that changing customer behavior is a challenge are in

support of Raham (2014) who cited that the retail industry is having a crisis with ever

changing customer preference and buying power whilst 5 (2+3) respondents are aligning

to what Uddin (2012) echoed that it’s not customers who have the problem but rather it

is the retail sector which lacks research on customer preference and perceptions .

However the bar graph above clearly indicates that 14 respondents were uncertain as to

whether advertising is a challenge or not whilst 6 disagree and 11 strongly disagree .

This in line with Randall and David (2011) position that organizations do not have

control over advertising as this dependents on what the customer perceives the

organization . Nevertheless 3 respondents supported that advertising is a challenge in the

industry although they are a small portion of the population .

High rentals had 9 respondents who strongly agree with it as a challenge in the retail

sector were 16 agree while 5 respondents are uncertain and 1 and 3 respondents both

disagree and strongly disagree respectively . The summation of 25 (16+9) respondents

enabled the author to conclude that high rentals are indeed a challenge which is existing

in the retail sector whilst 4 (1+3) who oppose this conclusion are insignificant number to

disrupt this assertion . Reliance on imports registered 16 respondents who strongly agree

were 15 agree to it as a challenge were 3 were neutral 0 disagree whilst 0 again

43

strongly disagree . According to these figures , it is evident that reliance on imports is a

challenge as 31(16+15) respondents echoed that it is a challenge and also to prove that

it is a challenge no respondent strongly disagree nor disagree to this . Therefore , in

conclusion about the challenges affecting retail industry , the author concludes that ,

reliance on imports is the highest challenge followed by changing customer behavior

followed by high rentals and competition and then inefficient supply chain while

advertising registered the lowest acceptance but more respondents disagreed to it as a

challenge .

4.6 Effects of rising operational costs on the performance of Coloursell

Figure 4.6. Comparison of impacts to performance

0

2

4

6

8

10

12

14

16

18

20

Strongly Agree Agree Uncertain Disagree StronglyDisagree

Comparison of impacts to perfomance

Reduced Cash Flow Declining Revenues Failure to expand operations Reduced profits

44

The researcher sort to determine as to which impact of rising operational costs greatly

affects the performance of the organization. To this end ,the above bar graph depicts the

comparison of each impact against each other. According to the bar graph ,the researcher

ascertained that profits are greatly affected by rising operational costs since 20 strongly

agree whilst 12 agree as also alluded by Bragg (2010). This is also supported by the fact

that all respondents were certain about their decisions as no respondent cited that he or

she was not certain about the fact that rising operational costs affect reported profits. The

2 respondents who cited that they strongly disagree about this assertion are an outlier as

they don’t disrupt the author to conclude that rising costs greatly affect profitability .

Further analysis reviewed that the second element affected by rising operational costs

was the cash flow base of the organization as 17 of the respondents were of the opinion

that cash flow of the entity is affected by rising operational costs as more funds will be

channeled towards financing these activities. This is also supported by 13 of the

respondents who agree that cash flow of entity is diluted by the increase in operational

costs. However a small number of 1 respondent was uncertain were 1 disagree whilst 2

strongly disagree with the view that cash flow is not affected by the increase of

operational costs.

The third element affected after profits and cash flow is revenue base of the entity. This

is depicted by 14 respondents who strongly agree whilst 15 agree. However 2 of the

respondents share the view that they are uncertain as to whether revenue of the

organization is reduced by an increase in operational costs. In spite of that 3 of the

respondents have the opinion that they disagree to the fact that rising operational costs

have any bearing on the revenue base of the organization. Based on these percentages

45

.it can be cited that revenue base of the entity is also affected by the increase in

operational costs as evidenced by 29 (14+15) respondents who are in support of this

assertion . This was also highlighted by Siyanbola and Raji (2013 ) that the greatest

impact of rising cost of revenue is felt through the pricing of the product as the entity

will try to recover its expenditure by charging high prices which detrimentally reduce

revenue figure.

The fourth and last element affected by the increase in operational costs is growth of

the organization. As shown by the graph above , it is clear that all respondents have

something to say about the growth of the entity. A close look indicates that 3 strongly

agree whilst 12 agree. Nevertheless 8 were uncertain whilst 3 strongly disagree and 8

disagree .These figures mean that ,growth of the entity is to a lesser extent affected by

the increase in operational costs as the organization might incur high costs whilst

expanding its operations. Those who agree are in line with what Shah and Malik (2011)

who posited that an organization experiencing rising costs will to a greater extent fail to

expand whilst those who argue about rising costs not affecting growth were in support

of Hongren (2010). Therefore to conclude that rising operational costs directly affect

growth of the entity is un justifiable as 19 (8+8+3) are in disagreement with this

assertion . However, it can be concluded that growth of the entity is to lesser extent

affected by rising costs as 15 (12+3) respondents were with the view that rising

operational cost affect growth .

In conclusion of the above comparison shown by the graph , the researcher came to

reach a point where he cited that profits are greatly affected by rising operational costs

46

followed by cash flow base then revenue figure and then lastly growth of the

organization .

4.7 Is cost control and cost reduction a necessity ?

Figure 4.7 Cost control and reduction a necessity or not

According to the pie chart above , it shows how Colouresell does not prioritizes cost

control and cost reduction in its trading activities. With the data presented above ,it is

clear that the majority of the respondents share the opinion that the organization is not

taking cost control and cost reduction a necessity. This is evidenced by 59%(20/34) of

the respondents who cited that the organization is not taking cost control and reduction a

priority. However 41%(12/34) of the respondents argue that the organization is prioritizing

cost control and cost reduction thereby aligning to what was postulated by Rustito (2014)

who cited that the survival of any business is based on maximizing profits whilst

minimizing costs. Therefore the researcher concluded that Colouresell Furnitures should

Yes, 41%

No, 59%

47

start to consider planning a cost reduction and control exercise since the organization is

facing rising operational costs but they are not prioritizing its impacts to the

performance of the organization.

4.8 Factors to Consider in initiating a cost reduction program

Figure 4.8 Factors in a cost reduction program

According to the graph above 16 respondents strongly agree that team work should be

included in a cost reduction program whilst 9 respondents agree to this notion . This was

also highlighted by Keller (2010) who cited that the key element in a cost reduction

program is cooperation from each and every employee .However other 9 respondents

were of the opinion that they disagree to the inclusion of team work in a cost reduction

program . Their opinion is in line with Kirli and Gumus (2011) view point that the most

important element is communication and support from top management . In spite of that

no respondent indicated that they are uncertain about the inclusion of this factor .

0

5

10

15

20

25

Risk Factors Involved

Team work

Identify and rank currentcosts

Evaluating the importance ofeach cost item

Monitoring andimplementing action plans

48

Identification and ranking of current costs registered 21 respondents who strongly agree

whilst 12 agree .This was also cited by Berk (2010) that identification of current costs

will help an organization to focus on specific costs which are affecting the organization

without disrupting its cost structure . A single respondent was uncertain as to whether

identification of current costs is important or not but this number is insignificant to

disrupt the conclusion made .

The greatest number under evaluating the importance of each cost item was 10 which

they disagree to the inclusion of this factor while 2 respondents were uncertain . This

was also cited by Pittman and Hawk (2013) who indicated that the evaluation of each

cost item might be biased as other departments in the organization will tend to cite that

their costs are important whilst they are not . However 7 respondents strongly agree and

7 agree that evaluating the importance of each cost item is necessary to be considered

in a cost reduction program . This is in support of what Siyanbola and Raji (2013)

citation that this factor enables the organization to be able to eliminate or scale down

unnecessary costs which do not directly affect the operation of the organization .

Monitoring and implementing action plans was supported by 30 (16+14) respondents

who strongly and agree respectively while 0 were uncertain and 4 disagree and then 0

strongly disagree . Those who are in favor of including this factor share the same view

of McConnik(2013) who cited that for an effective cost reduction plan there is need for

supervision of employees and educating them why the chosen cost item is being

reduced . However the 4 respondents who disagree are in support of Keller (2010) who

indicated that employees will tend to resist to implement procedures designed to scale

down expenditure .

49

The last factor to be taken into consideration was risk factors involved of which 16

respondents agree while 0 strongly agree were as 7 were uncertain and 4 disagree and

then 7 strongly disagree . The 16 respondents who agreed are in support of Rothberg

(2012) citation that the management should bear in mind that cost reduction is a high

risk area which when executed haphazardly can potentially affect the organization goals

and objectives . Nevertheless 11(4+7) respondents who disagreed share the view point

which was also highlighted by Osadi and Okpako (2010) .

In conclusion the researcher discovered that identification and ranking of current costs

received the highest consideration of 33 respondents followed by monitoring and

implementing action plans with 30 respondents and then team work with 25 respondents

followed by risk factors with 16 respondents and then the lowest consideration came to

evaluating the importance of each cost item which was supported by 14 and disagreed

by 18 respondents .

50

4.9 Methods to Control and Reduce costs

Figure 4.9 Comparison of the methods

The researcher used the bar graph above to determine which method is best appreciated

by respondents as an effective method of cost control and reduction .With the evidence

above , the researcher discovered that budgeting was highly considered as the most

effective method since all respondents (19+15) strongly agree and agree that its effective

and that no respondent indicated that they strongly disagree ,disagree nor were uncertain

about the use of the method as also alluded by Hongren (2010) that this is a simple

way of controlling expenditure using internal information . The second appreciated method

was target costing as 27 ( 15+ 12/) of the respondents were in support of the use of the

method. This in line with what Allahverdizadeh (2012) who indicated that this method

enables the organization to recover full costs as the product will be sold at a price

which in cooperates all costs .This is also supported by the fact that no respondents

02468

101214161820

Strongly Agree Agree Uncertain Disagree StronglyDisagree

Comparison of the Methods

Target Costing Work Study Benchmarking Activity Based Costing Budgeting

51

strongly disagreed nor were uncertain about the applicability of the method although 7

of the respondents disagreed that target costing is effective as also echoed by Bastle et

al (2010) who cited that this method ignores other cost elements like fixed costs and

administration costs in its calculation of product costs.

The third method considered by respondents after target costing was work study which

registered 23(7+16/) of respondent who indicated that it’s one of the effective methods to

control and reduce costs . However 11 of the respondents were uncertain about work

study but this percentage was not significant enough to pass a decision that work study

is the third method considered as no respondents strongly disagree or disagree to the

applicability of the method . The forth method appreciated was benchmarking as 21

(8+13) respondents both strongly agree and agree that its effective whilst 13 respondents

disagree .Those in favor are in conformity of what Barbole (2013) indication that

benchmarking is effective as it uses tried and tested measures applied in the industry .

However 13 respondents were in line with Soni and Kodali (2010) who cited that it is

difficult to gather data from competitors who will not be willing to disclose their

operating procedures .

The fifth and last method was activity based costing which 8 respondents strongly agree

while 11 agree were as 4 are uncertain and then 11 disagree 0 strongly disagree .A total

of 19(8+11) are in support of Alizera (2011) who cited that ABC separates non value

from value adding activities thereby eliminating unnecessary incurrence of costs

.However the 11 who disagree were in line with Adeninji (2011) and Bastle et al

(2010) who indicated that the problem of ABC is that it is complex to implement .

52

4.10 Cost reduction an effective way of minimizing operational costs

Figure 4.10 Cost reduction an effective way of minimizing costs

65% (22/34) of the respondents agree that cost reduction is an effective way of

minimizing costs as alluded by Siyanbola and Raji (2013) who cited that cost reduction

is of paramount importance significant to the business world and that the ignorance of

which will definitely affect the resultant profits of the organization . However , 35 %

(12/34) of the respondents share the view that cost reduction is not the effective way of

minimizing costs as supported by Rothberg (2012) when he cited that unfortunately

some companies implement cost cutting measures haphazardly that do not take into

account potentially damaging long-term impacts .Therefore the need to apply and

implement cost reduction measures in a strategic manner arises .

Strongly Agree

Agree

Uncertain

Strongly Disagree

Disagree

65%

35%

Cost Reduction an Effective way of Minimizing costs

53

4.11 Other information necessary concerning this topic

4.11.1 Current Economic Challenges

The majority of the respondents indicated that the topic under study did not mention or

take into account the current economic conditions prevailing to the company. Their

arguments were that the company might be experiencing rising costs but it might not be

due to failure of the organization to reduce costs rather it might due to harsh economic

factors being experienced by the nation at large .

4.12 Interviews

The researcher managed to carry out five interviews with the executive management .The

researcher received a 100% response rate from the interviews ,henceforth ,the analysis of

data from interviews now follows .

Question 1- What major costs are reducing profits ?

According the executive management , they all acknowledged that fuel ,advertising

,telephone and repairs and maintenance are the major costs affecting profits at

Colouresell. This in support of what was cited by the Financial Accountant in his report

of 2015 that the above costs are contributing a greater percentage towards the decline of

profits at the organization .In line with that ,one of the interviewees indicated that

advertising is a major cost since the furniture retail industry sells products which are

not necessities therefore the need to extensively advertise arises .On further questioning

the responded highlighted that they advertise using the traditional methods through the

press and television . However of the five interviewees ,three of them mentioned that the

54

other costs which is detrimentally reducing their profits are handling costs of inventories.

They cited that this cost is becoming a troublesome costs which occur both at branch

level , from supplier and also upon delivery of the product to the customer .

Question 2-What methods do you think Coloursell can employ to reduce these costs

During the interview , the researcher leant that four of the respondents cited budgeting ,

benchmarking and target costing as one of the methods they can employ to reduce and

control costs . One of the respondents indicated that budgeting is easy to apply as all

information used in its execution is obtained internally although the application restricts

the entity from being flexible as it will be glued to abiding to the budget instead of

leaving room for extensions .This citation was also alluded by Olabis et al (2012) that

the budget may hinder the organization to be flexible thereby failing to adapt to changes

in the business environment .

However ,the researcher leant that the organization does not prefer the use of ABC as

one of the methods because of its complex implementation and that what assurance

does the choice of cost driver give the organization to conclude that costs will be

controlled or reduced . This position was also cited by Dandango et al (2014) and

Oluwagbemiga et al (2014 ) when they indicated that the major drawback of ABC is its

implementation phase which is complex and requires proper identification of cost drivers

and distinguishing value adding activities from non -value adding activities .

Question 3 -What challenges are you facing as Coloursell in the retail sector ?

Two of the respondents indicated ever changing customer behavior , competition and

imports . On top of that , the other three mentioned supply chain problems and failure

55

of paying amounts due by customers . The two respondents emphasized that changing

customer behavior in the retail sector is one of the most deadly problems affecting the

performance of the industry . They opined that due to the emergency of free excess to

information and that they are finding it difficult to have cash , customers are becoming

more and more sensitive and analytical to products and prices before they make final

decision to purchase the product . This assertion was posited by Schiffman and Kanuk

(2010) that the reason why consumers are changing their behavior especially in the retail

sector is due to the fact that they have perfect knowledge in all respects .

These two respondents also mentioned that competition is one challenge which is

affecting the organization .They mentioned that competition mainly affects the pricing

policy of the organization as the organization will be forced to price their products

based on what the market perceives and not what the organization perceives .Therefore

,this principle will deteriorate the reported revenue . This is in support of what E-

commerce (2011) cited that the negative impacts of competition is to force an

organization to further reduce their prices of which the retail industry naturally has the

lowest mark ups . Nevertheless , imports and failure of paying amounts due by customers

were of interest to the researcher as they came as new information .

Question 4 -Is Coloursell considering cost reduction a priority ?

According to all interviewees , they all acknowledged that they are trying to prioritize

cost reduction based on the fact that rising operational costs are now becoming a major

problem in their trading activities . They cited that of late the organization was not aware

of the huge impacts and that the rising operational costs were unveiled late last year .

56

However , they indicated that the organization is now considering cost reduction a

priority .

Question 5 -What factors do you think Colouresell should consider in starting a

cost reduction program ?

Four respondents cited team work ,identifying rising costs and monitoring and

implementing action plans . All respondents were in support of team work as a a key

element for an effective cost reduction plan program to be a success .They posited that

without team work and free communication between employees and management , the

program will be a failure .This was also heighted by Keller (2010) when he indicated

that individualism and cohesiveness in a cost reduction program is a dead end and that

this will facilitate resistance from employees . Other factors which they indicated above

were said they will be success as long as proper team work is implemented .

Question 6 -Any comment or suggestion with regard to cost control at Colouresell ?

One of the respondents indicated that it does not necessarily mean that the organization

should embark on cost control and cost cutting measures rather the organization should

also think about turn around strategies like for example changing the way the

organization operates in cooperating current economic situations . The respondent cited an

example during the period of 2008 when the nation was facing hyperinflation . During

that period , immediate decisions were needed to be taken without basing the decision

on documented procedures or policies .In line with that , the other respondent opined that

cost control is a gradual and continuous process of which the organization requires

instant or rather immediate solution to curb the rising costs .

57

Still on the same note , other respondents were of the view that yes cost control is of

paramount importance to the organization but care should always be given to the way

the entity approaches this technique in trying to circumvent rising operational costs .

They echoed that , cost control and cost reduction strategies should be implemented in

a strategic manner or rather a well thought plan which will enable the organization to

improve its performance thereby increasing its profitability .

4.13 Quantitative Analysis (regression results )

Step wise regression was used to come up with the best model that suits the data ,this is

a regression technique that stimulate variables to come up with the best model .The

variables entered and removed in the model until the best equation has been obtained.

Descriptive Statistics

N Minimum Maximum Mean Std. Deviation Kurtosis

Statistic Statistic Statistic Statistic Statistic Statistic Std. Error

NET PROFIT 48 $150,098 $300,444 $215,441.46 $44,086.743 -1.241 .674

TELEPHONE COSTS 48 $2,019 $3,560 $2,459.77 $420.557 .555 .674

ADVERTISING

COSTS 48 $1,990 $2,912 $2,453.94 $234.941 -.347 .674

FUEL COSTS 48 $4,810 $7,893 $6,566.46 $711.490 .959 .674

REPAIR &

MAINTENANCE

COSTS

48 $1,602 $2,791 $2,309.75 $206.768 3.452 .674

Valid N (listwise) 48

58

The table shows the descriptive statistics for the variables available for analysis , the N

represents the total cases that where available per each variable .All variables were 48

months for the period 2011 -2014

The standard deviation is acceptable for all the variables since the observed values are

not deviating too much from the mean .

The kurtosis values are not great except for the last variable with 3.452 , which shows

that the variables are not departing from Normality .

Correlations

NET

PROFIT

TELEPHONE

COSTS

ADVERTISI

NG COSTS

REPAIR &

MAINTENA

NCE COSTS

FUEL

COSTS

NET

PROFIT

Pearson Correlation 1 -.609**

.205* -.573

** -.401

*

Sig. (2-tailed) .000 .035 .000 .038

N 48 48 48 48 48

TELEPHON

E COSTS

Pearson Correlation -.609**

1 -.077 .254 .350*

Sig. (2-tailed) .000 .601 .081 .015

N 48 48 48 48 48

ADVERTIS

ING COSTS

Pearson Correlation .305* -.077 1 -.227 .062

Sig. (2-tailed) .035 .601 .121 .675

N 48 48 48 48 48

59

REPAIR &

MAINTEN

ANCE

COSTS

Pearson Correlation -.573**

.254 -.227 1 -.281

Sig. (2-tailed) .000 .081 .121 .053

N 48 48 48 48 48

FUEL

COSTS

Pearson Correlation -.301* .350

* .062 -.281 1

Sig. (2-tailed) .038 .015 .675 .053

N 48 48 48 48 48

**. Correlation is significant at the 0.01 level (2-tailed).

*. Correlation is significant at the 0.05 level (2-tailed).

The above table shows bivariate correlations across all the variables and Pearson

Correlation method was used to access the basic relationship between these variables .The

researcher chose to use Pearson method since the kurtosis values has shown that the data

is approximately Normal .The findings showed that variables Telephone costs (-0.609)

,repairs and maintenance costs (-0.507) ,fuel costs (-0.401) have a negative correlation

which means that as these costs increase the net profit will be decreasing .The variable

advertising shows a positive correlation of 0.205 but not significantly different from zero.

Correlations between the independent variables does not make us to suspect the presents

of multi-collinearity which is a deadly disease in regression analysis which can lead us

to making incorrect inferences.

The variables telephone costs and repairs and maintenance shows a Sign value of 0.000

which shows that the results are statistically significant at the level 0.01 -99% degree of

confidence and also that the results for Advertising costs and fuel costs having a 95%

degree of confidence .

60

Variables Entered/Removed

Model

Variables

Entered

Variables

Removed Method

1 TELEPHON

E COSTS

.

Stepwise (Criteria: Probability-of-F-to-enter <= .050,

Probability-of-F-to-remove >= .100).

2 REPAIR &

MAINTENA

NCE COSTS

.

Stepwise (Criteria: Probability-of-F-to-enter <= .050,

Probability-of-F-to-remove >= .100).

3 FUEL

COSTS

.

Stepwise (Criteria: Probability-of-F-to-enter <= .050,

Probability-of-F-to-remove >= .100).

a. Dependent Variable: NET PROFIT

The table shows the variables that were entered in the regression model .The

variables Telephone ,repairs and maintenance and fuel costs succeeded in the model

because of having a probability of the F value less than or equal to

0.05.Advertising cost did not meet these requirements since it had a probability of

the F value greater than or equal to 0.100.Telephone costs was the first variable to

be included in the model due to its greater impact on profitability followed by

repairs and maintenance which was entered in model 2 ,and fuel costs having a

lessor impact on profitability but statistically significant .

61

Model Summary

Model R R Square

Adjusted R

Square

Std. Error of

the Estimate

Change Statistics

R Square

Change F Change df1 df2

Sig. F

Change

1 .609a .371 .357 $35,341.730 .371 27.137 1 46 .000

2 .747b .558 .538 $29,959.146 .187 19.014 1 45 .000

3 .803c .646 .621 $27,128.787 .088 10.880 1 44 .002

a. Predictors: (Constant), TELEPHONE COSTS

b. Predictors: (Constant), TELEPHONE COSTS, REPAIR &

MAINTENANCE COSTS

C Predictors: (Constant), TELEPHONE COSTS, REPAIR & MAINTENANCE COSTS,

FUEL COSTS

The model summary is showing us why model 3 was chosen to be the best, since it has got the

highest R Square which shows that 0,621of the variation in the dependent variable (Profit ) is

being explained by the independent variables.

The first simple linear regression model having dependent variable(Profit) and independent

variable(Telephone costs) showed a good Sig value but because of a lower R Square of 37,1%

showed that we need also to take into consideration the effect of other variables since the

omission of relevant variables can lead to the problem of Misspecification .

62

This lead to the inclusion of the variable Repairs & Maintenance cost in model 2 which lead to

a multiple regression model having explanatory variables Telephone costs and Repairs &

Maintenance. The variable Repairs & Maintenance costs was added to the model because of a

contribution of 18,7% to the R Square which made it reach a level of 55,8%.

Since the R square was now satisfactory but not that bigger ,this caused the variable Fuel to be

added in the model having a positive contribution of 8.8% to the R square making the R square

to reach 64,6%. This result shows us the proportion of variance that is being explained by the

model.

Comparing the standard error of the estimates for the 3 models we can see that we started with a

an error of

$35 341,73 and ended up at $27 128,78 which shows that the dispersion of estimates from the

mean has decreased. Which is why model 3 was considered to be the best

Coefficientsa

63

Model

Unstandardized Coefficients

Standardized

Coefficients

t Sig. B Std. Error Beta

1 (Constant) 372510.595 30579.935 12.182 .000

TELEPHONE COSTS -63.855 12.258 -.609 -5.209 .000

2 (Constant) 563316.342 50859.848 11.076 .000

TELEPHONE COSTS -51.952 10.744 -.496 -4.836 .000

REPAIR &

MAINTENANCE

COSTS

-95.285 21.852 -.447 -4.360 .000

3 (Constant) 731424.504 68692.205 10.648 .000

TELEPHONE COSTS -35.593 10.920 -.340 -3.259 .002

REPAIR &

MAINTENANCE

COSTS

-124.490 21.678 -.584 -5.743 .000

FUEL COSTS -21.456 6.505 -.346 -3.298 .002

Dependent profit

Since the Sig value for model 3 is less than 0.05, we can assume that the estimate in column

“B” can be asserted as true with a 95% level of confidence.

The model that we thought could explain profit did not come as it is since advertising

was not in the model to all findings that we have found .The model shows that as

telephone costs ,repairs and maintenance and fuel costs increa ses profit is decreasing .But

increase in advertising has shown that it decreases net profit at a lower level even

though the contribution of advertising is not statistically significant .

64

According to the findings we will have equation.

Y=β0+β1X1+βX2+β3+e

PROFIT= 731424.504-35.593TELEPHONE COSTS-124.490REPAIR AND MAINTENANCE-

21.456FUEL COSTS

Excluded variables

Model Beta In t Sig.

Partial

Correlation

Collinearity Statistics

Tolerance

1 ADVERTISING

COSTS

.259a 2.312 .025 .326 .994

FUEL COSTS -.100a -.798 .429 -.118 .877

REPAIR &

MAINTENANCE

COSTS

-.447a -4.360 .000 -.545 .935

2 ADVERTISING

COSTS

.174b 1.748 .087 .255 .948

FUEL COSTS -.346b -3.298 .002 -.445 .731

3 ADVERTISING

COSTS

.177c 1.979 .054 .289 .948

65

a. Predictors in the Model: (Constant), TELEPHONE COSTS

b. Predictors in the Model: (Constant), TELEPHONE COSTS, REPAIR & MAINTENANCE COSTS

c. Predictors in the Model: (Constant), TELEPHONE COSTS, REPAIR & MAINTENANCE COSTS,

FUEL COSTS

d. Dependent Variable: NET PROFIT

The table shows why Advertising did not

make it in the model since it has got a

Sign value that is not less than 0.05.

4.14 Chapter Summary

This chapter presented and analyzed data which was converted to useful information

through the interpretation of the data. Based on chapter four , the following chapter will

focus on providing summaries ,conclusions and recommendation .

66

CHAPTER FIVE

SUMMARIES, CONCLUSION AND RECOMMENDATIONS

5.0 Introduction

The preceding chapter presented and analyzed data collected by use of questionnaires

and interviews .To this effect , after having obtained the research findings , chapter five

will now draw summaries of each chapter , draw conclusion from findings and then later

on make recommendations which will enable Colouresell Furnitures to improve its

performance .

5.1 Chapter Summaries

5.1.1 Chapter One

This chapter uncovered the background of study and the problem statement which lead

the author to investigate on the impact of rising operational costs on Colouresell

performance . The chapter later on gave the main research question ,sub research questions

and the objectives of the study which the author intended to achieve during the

research.. The assumptions ,significance of study ,limitations and also delimitations of

study were highlighted by the author . The last aspect of the chapter was the definition

of terms which were used during the investigation .

5.1.2 Chapter Two

The major thrust of chapter two was to investigate what other scholars and authors cited

concerning the impact of rising operational costs on the performance of the entity .This

was achieved by answering the research objectives as indicated in chapter one .Scholars

67

like Bragg (2010) ,Berry (2011) ,Siyanbola and Raji (2013) were referred and cited to

during the review of literature .

5.1.3 Chapter Three

The researcher outlined the research methodology which he adopted . A descriptive

research design (survey) was employed , the population which author targeted was given

and a sample size of 40 was used .The researcher later on adopted the use of stratified

sampling technique . Primary and Secondary data sources were both employed to gather

qualitative and quantitative sources of information .The validity and reliability of research

instruments was attained whilst the data gathered was to be analyzed and presented in

the form of tables ,charts and graphs .

5.1.4 Chapter Four

This chapter emphasized on presenting and analyzing data gathered through the

methodology outlined in chapter three. The raw data gathered was presented , analyzed

and later on interpreted in order to make the information useful .To this fact , the

research findings were enough to enables the author to make conclusions and

recommendations to the organization under investigation .

5.2 Research Findings

5.2.1 Challenges faced in the retail industry

It was discovered that competition , high rentals and reliance on imports are the major

challenges hindering the performance of Colouresell in the furniture retail industry .In the

same vein ,changing customer behavior was unveiled as one of the challenges but both

68

respondents from questionnaires and interview guide indicated that this challenge is

existing because of lack of research and knowledge about customer preferences and

perception to products by the whole retail sector .Insufficient supply chain was cited

whilst failure to pay amounts due by customers was also cited in interview as another

challenge affecting the furniture company . However , advertising received a disagreement

that it a challenge affecting retail industry . This was also cited in an interview that as

far as Coloursell is concerned , they are not having any challenges with advertising

although the expense of advertising is rising .

5.2.2 Impact of rising costs on organization performance

According to research findings , it was clear that rising operational costs do have a

direct bearing on reported profits of the entity . In line with that , other respondents cited

that cash flow of the organization is disrupted as much of the resource will be

channeled towards financing operational costs thereby sidelining other expenditures which

the organization is supported to consider like payment of suppliers . Others l highlighted

that the revenue is affected through product pricing as the organization will be trying to

recover its expenses .However some respondents disagreed that rising operational costs

have a bearing on growth of the entity .

5.2.3 Factors to consider for an effective cost reduction initiative program

The results indicate that an effective cost reduction initiative program should include

team work , identification and ranking of current costs ,monitoring and implementing

action plans . However evaluating process was disregarded as it is time consuming

biased.

69

5.2.4 Methods of reducing costs and improve profits

The results indicate that ,of the five methods mentioned , respondents are positive that

budgeting , target costing ,work study and benchmarking are some of the effective

methods which can be employed to reduce costs . Activity based costing was disregarded

as an effective method as it is complex to implement .According to this analysis it is

evident all these methods in their individual nature are not capable of ensuring an

effective cost control and cost reduction policy since neither one of them was able to

control and reduce costs . This implies that these methods in their single nature cannot

be relied on as they can’t give the organization an absolute assurance of controlling

and reducing costs.

5.3 Conclusions

Based on the research findings captured through the application of quantitative and

qualitative techniques , the author concluded that rising operational costs have a direct

impact on the performance of the organization . This was evident when the major costs

experienced by CF such as telephone charges , fuel ,and repairs and maintenance both

negatively affected the profitability of the entity as highlighted by the regression model .

However , the researcher also discovered that ,it is not only the rising operational costs

which impact performance or rather profitability but they are other factors which need to

be considered such as challenges in the industry as well as the methods and strategies

adopted by the organization to control and reduce costs . On top of that , the researcher

also attained that the current economic challenges of the nation should be taken into

account as well.

70

5.4 Recommendations to CF

As evidenced by the research findings ,CF should apply simultaneously all traditional

cost control and cost reduction methods as in their individual nature they are not

producing positive results . Thus , they should use budgeting ,benchmarking , target

costing as well as work study in order to have a sound strategy in monitoring and

reducing their operational expenses .CF should adopt new ways of advertising like using

technological advertising tools for example use of social media platforms and the web

site of the entity as more customers are spending much of their time on the internet

Despite stiff internal controls applied regarding the use of the telephone facility , CF

should move away from the traditional use of the landline as source of communication

within and outside its organization .They should make use of new players in the industry

like africom which is currently charging $10 unlimited calls per month between africom

to africom subscribers .They can use this facility to communicate within the organization

like branch to branch or branch to head office .They will definitely reduce their

telephone bill by a significant proportion. .CF should implement a cost reduction

program in a strategic manner . This can be achieved by involving all employee , setting

transparent objectives , continuous communication of employees and management ,

rewarding employees after the successful work of the program and also highlighting the

need to embark on such a program.

5.5 Further research

To investigate the impact of a cost reduction policy on organizational performance .

71

APPENDIX 1 REGRESSION DATA SET

year month profit telephone cost advertising cost fuel cost repair & maintainance

2011 1 251902 2570 2200 6871 2000

2011 2 267999 2678 2109 6791 1901

2011 3 240023 2408 2300 6902 2091

2011 4 300444 2600 2294 6701 1906

2011 5 279123 2549 2389 6982 2089

2011 6 239874 2400 2340 7009 2189

2011 7 204569 2389 2359 7691 2294

2011 8 218456 2300 2210 7609 2283

2011 9 258912 2567 2201 7028 2199

2011 10 251003 2510 2219 7000 2102

2011 11 248910 2500 2280 7893 2289

2011 12 210967 2430 2298 7278 2295

2012 1 260129 2589 2100 6923 2174

2012 2 256781 2501 2276 7068 2190

2012 3 284523 2674 2201 6509 2167

2012 4 244484 2400 2234 6934 2157

2012 5 259012 2435 2209 5094 2487

2012 6 293456 2508 2146 4981 2389

2012 7 240000 2492 2246 5019 2400

2012 8 267190 2609 2019 4810 2389

2012 9 245008 2549 2145 5123 2419

2012 10 256780 2578 2109 5001 2387

2012 11 222000 2498 2245 5671 2401

2012 12 300190 2709 2201 6001 2207

72

2013 1 180012 2435 2409 6591 2387

2013 2 209123 2460 2398 6319 2306

2013 3 196400 2440 2319 6398 2340

2013 4 180023 2400 2307 6412 2378

2013 5 150098 2308 2245 6598 2419

2013 6 160034 2319 2278 6709 2432

2013 7 187345 2509 2298 6500 2410

2013 8 186444 2501 2240 6521 2439

2013 9 185000 2498 2234 6576 2459

2013 10 194000 2512 2210 6401 2389

2013 11 179923 2397 2303 6501 2403

2013 12 180000 2400 2219 6499 2399

2014 1 189452 2419 2200 6309 2309

2014 2 69022 2300 3560 6900 2490

2014 3 67001 2309 3478 7190 2506

2014 4 69023 2318 3290 7001 2409

2014 5 70685 2327 3103 6904 2319

2014 6 71003 2430 3112 6834 2301

2014 7 68012 2321 3297 6945 2398

2014 8 69710 2340 2982 6853 2368

2014 9 69678 2339 3012 6850 2360

2014 10 68233 2336 3290 7012 2489

2014 11 69001 2348 3100 6978 2401

2014 12 70233 2350 2855 6500 2389

73

APPENDIX A

Midlands State University

Department of ACCOUNTING

P. Bag 9055

Gweru

01 April 2015

Dear Sir

RE: RESEARCH PROJECT ASSISTANCE

I am-a 4th

-year student-at the Midlands-State-University pursuing a B. Comm. Honors-degree in

Accounting I am carrying-out a research on An Analysis into the impact of rising costs on

organizational performance and cost reduction strategies A case of Colouresell

Furnitures . This is in partial-fulfillment of the requirements of the Bachelor of Commerce

Honors degree in ACCOUNTING that I am currently undertaking.

I kindly ask-you to assist by completing the questionnaire-attached-to-this-letter. The

information you provide as well as your personal views will be treated with confidentiality and

used for the purpose of this research only.

Your contribution to this research is greatly appreciated

Yours faithfully

Moyo Nixon

74

APPENDIX B

QUESTIONNAIRE

1 Gender Male { } Female { }

2 How long have you been employed by Colouresell Furnitures

Less than 2yrs { } 3yrs-5yrs{ } 6years and above { }

3 Which category do you fall in

Middle management { } Finance & accounts clerk{ } Branch sales representative { }

Branch Head { }

4 Is Coloursell Furnitures experiencing rising operational costs?

Strongly Agree{ } Agree { } Uncertain {} Strongly Disagree{ } Disagree{ }

5 The following are the challenges faced by the retail industry:

Challenge Strongly

Agree

Agree Uncertain Disagree Strongly

Disagree

Competition

Inefficient

supply chain

Changing

customer

behavior

Advertising

High rentals

Reliance on

imports

6 The following are the effects of rising operational costs on the performance of the

Coloursell:

Effect Strongly

Agree

Agree Uncertain Disagree Strongly

Disagree

Reduced

profits

Failure to

expand

75

Declining

Revenues

Reduced

cash flow

7 Is cost control and cost reduction a necessity in your organization

Yes { } No { }

8 Coloursell should consider the following factors in initiating a cost reduction

program

Factor Strongly

Agree

Agree Uncertain Disagree Strongly

Disagree

Team work

Identify and

rank costs

Evaluating

the

importance

of cost item

Monitoring

&

implementing

action plan

Risk factors

involved

9 The following are the methods which Colouresell can use to minimize its cost

Method Strongly

Agree

Agree Uncertain Disagree Strongly

Disagree

Budgeting

Activity based

costing

Benchmarking

Work study

Target

costing

10 Cost reduction is an effective way of minimizing operational cost

Strongly agree{ } Agree { } Uncertain { } Strongly Disagree { } Disagree { }

11 What other information do you think is necessary concerning this topic

76

APPENDIX C

INTERVIEW GUIDELINE

1 What major costs are reducing profits?

2 What methods do you think Coloursell can employ to reduce these costs?

3 What challenges are you facing as Coloursell in the retail sector?

4 Is Colouresell considering cost reduction a priority?

5 What factors do you think Coloursell should consider in starting a cost reduction

program?

6 Any comment or suggestion with regard to cost control at Coloursell ?

77

Reference List

Acquach (2011),Business Strategy and Competitive Advantage in Family Business in

Ghana:The Role of Social Networking Relationships,Journal of Developmental

Entrepreneurship.

Adeniji ,A.A.(2011):Cost Accounting ,A Managerial Approach ,EL-TODA Ventures Ltd 5th

ed

Ansley,M(2014)Lewis a solid investment in a challenged industry

Alireza .A.S,Mahdi .A.(2012),Target and Kaizen Costing ,World Academy of Science

,Engineering and Technology ,Volume 6,No 2.

Amogh ,K ,Rizwan ,S,Prathmesh,P(2013)Data Collection-Primary and Secondary

Barbole ,A .N ,Yuvraj.D.N and Santosh ,D.P,(2013): Impact of Cost Control and Cost

Reduction Techniques on Profitability on Manufacturing Sector ,Indian Streams

Research Journal ,Volume 3,Issue 5.

Baroto , M .B , Abdullah ,M .M ,and Wan ,H.L(2012),Hybrid Strategy :A New Strategy For

Competitive Advantage. International Journal of Business and Management .

Bastl ,M , Grubic, T , Templar , S , Harisson , A ,Fan ,I.S(2010),Inter organizational costing

approaches, the inhabiting factors ,The International Journal of Logistics Management,

Emarald Insight.

Berry ,A.B(2011)Timeliness and Customer Satisfaction

Berk ,J .(2010):Cost Reduction and Optimization for Manufacturing and Industrial

Companies ,Scrivener Publishing LLC

Bragg,S.M (2010) ,Cost Reduction Analysis ,Tools and Strageties:John Wiley and Sons, Inc,

Hoboken New Jersey.

78

Bragg,S.(2011)The new Corporate Leadership Manual ,Strategic and Analytical Tools for

Growth.Willey Corporate Finance and A New Jersey:John Willey and Sons

Chan,S.C(2010)Study on inventory and transportation integration of auto parts based

on supply chain.Chongqin University.

Colouresell Furnitures Management Accounts Report (2015

Cruceru ,A.F.(2012),Competitive Success :Ambition or Necessity .International Journal of

Academic Research in Economics and Management Sciences November 1(6).

Dandago ,K.I,Maude ,E and Gambo ,J.(2014)Applicability of Activity Based Costing By

Manufacturing Firms in Zaria local Government Area of Kaduna State ,Nigeria :Global

Advanced Research Journal of Management and Business Studies Volume 3(6)pp 267-273.

Donald ,R.C ,Pamela ,S.S (2011) Research methods and Processes forum

E-Commerce Report (2011) Current Challenges Facing Retail Sector

ENGA14 Finnish Institution Research Paper(Hopkins)(2013)Primary ,Secondary and

Tertiary

Fung Business Intelligence Center(2013) Retail Market In China

Guest(2012) 4 Reasons why completion can benefit your business :Soloville ,Marketing

Professional services.

Harri,D(2014)Regression Analysis :Find the best fit for your Statistical model

Hale,J.(2011)The 3 Basic Types of Descriptive Research Methods :World Of

Psychology

Hayes (2011) Glossary of research terms

Hongren,C(2010)Introduction to Management Accounting ,Prentice ,Hall-Inc,New Jersey

Hungwe .A (2015) Management Accounts Department meeting ,January 17,Colouresell

Furnitures Secretar’s minutes

79

Jenniferc(2014)Advantages of Primary Research: Get a firsthand Experience

Kadzere .M (2014) TN Empire crumbles .The Herald ,November 20

Kama l, Kumar ,A(2014)Retail Sector :Growth and Challenges Perspective in India

International Journal on Emerging Technologies(1)69-73

Keller ,(2010)Cutting Costs ,Keeping Quality, Financing Strategies For Youth-Serving

Organizations in a Difficult Economy, The Finance Project.

Kirli,M and Gumus ,H(2011),The Implementation of Strategic Management Accounting

Based, A value Chain Analysis: Value Chain Accounting, International Journal of Social

Sciences and Humanity Studies Volume 3,No 1

Kumar ,R(2010) Research Methodology .New York APH Publishing

Kumar ,M.K.M(2013)II2nd MUSC Manasagagotri , Mysore Source of data in research

Kristie .L(2014) Challenges of Retail Marketing

Long street ,Walker, Winters(2012)Collecting data Research with Questionnaires and

Interviews

Ludy ,P.J.(2010) Profit Building Cutting Costs Without Cutting People .California Berset

,Koehler Publisher

Ludy,M.N(2012)Methods of data Collection

Ljubo,M, Velimir ,D,Miljan,K(2011)Application of Benchmarking Method in the

Construction Companies :FACTA Universitatis ,Series ,Architecture and Civil engineering

Vol 9,No 2 pp 301 -314

Magunde .G (2015) Management Accounts Department meeting ,January 17 ,Coloursell

Furnitures Secretary’s minutes

McCornick ,T.(2010)Strategic Cost Reduction Steps To Success, Accountancy

Ireland,42,pp56-58

80

Mharadze .T (2015) Management Accounts Department meeting ,January 17

,Colouresell Furnitures Secretary’s minutes

Mohamed .S.M.(2013)A Review of Benchmarking Implementation Problems: The Case

of UAE Industrial Companies, Salem College of Business Administration ,University of

Sharjah, United Arab Emirates ,The Journal of International Management Studies Vol 8,No

2

Mohani ,J.B.C(2013)Retail business management in india -challenges and strategies.

International Journal of Business and Management Invention Iss online 2319-8028

Vol 2 Issue 21 March

Moorhouse (2011),Delivering Successful Cost Reduction Programs

Murad ,S.A(2014)Competitive Advantage ,Through Benchmarking :Field Study of

Industrial Companies Listed in Amman Stock Exchange :Journal of Business Studies

Quarterly ,Vol 5 No 4 ISSN 2152-1034

Neha ,P(2013)Retail Marketing in the new Millennium :Emeging Issues and Trends

,Journal of Business Research Management and Social Sciences Research No 2319-5614 Vol

2 No 5

Ndife ,C.F.(2014)Cost Minimization and Firms Competitive Advantage .Journal of

International Academic Research for Multidisciplinary Impact Factor 625 Volume 2 Issue 9

October

Ogbadu,A.O(2009)Profitability through effective management of materials ,Journal of

Economics and International Finance Vol 1(4)pp99-105

Olabisi,J.S(2012)Kaizen Cost Management Techniques and Profitability of Small

Enterprises in Ogun State, Nigeria ,Research Journal of Finance and Accounting

3(5),103-111

Oluwagbemiga, O .E, Olugbenga ,O .M, Zaccheaus ,S.A(2014)Cost Management Practices

and Firms Performance of Manufacturing Organizations .International Journal of

Economics and Finance Vol 6 No 6 ISSN 1916-971X

81

Osadi ,B.E and Okpako ,U.L(2010),Cost Management Strategy .A Tool For Improving

Efficiency In Business Performance .International Journal of Economic Development Research

and Investment 1(2)

Parker .K (2011) Cost saving strategies .New Delhi :Kogan page publisher

Panwarden .R (2014) Descriptive research design :Defining your respondents and

drawing conclusions. Exploratory Research

Pick,P(2014)Descriptive Research :Defining Your Respondents and Drawing

Conclusions

Pittman ,D and Hawk ,R.(2013)Financial Planning and Cost Management ,A Finance and

Management Report SR41 1 June

Raham,M,N(2014)A Study on Saudi Arabia Retail Dynamics:its potential future and

challenges .International Journal of Business and Economics Development Vol 2 No 1

Randall,A.L ,David ,H.R(2011)Does Retail Advertisng Work.

Retail Forum for sustainability(2010)Issue paper on marketing and effective

communication ,Issue paper No 3 April

Rof,M.L(2012)Kaizen Costing Method and its Role in the management of an

entity.The Young Economists Journal 104-109

Rothberg ,F.(2012)The Importance of Strategic Cost Cutting :CFO Edge,LLC.

Relethford,J.H(2012)Human Population Genetics.New Jersey,John Wiley and Sons

Richa(2014)Benefits of SPSS .Benefitof.net

Rutsito .T(2014) Reducing Communication costs by half .The Herald November 13

Sani,A ,Allahverdizadeh ,M(2012)Target and Kaizen Costing.

Schiffman,LG and Kanuk,LL(2010-11)Consumer Behaviour,Prentice Hall pf India ,Private

Limited,New Delhi

82

Selman ,E.F(2014)Descriptive Research Design

Siyanbola ,T.T and Raji ,G.M(2013):Impact of Cost Control on Manufacturing Industries’

Profitability. International Journal of Management and Social Sciences Research Volume 2 .

Sokefun ,A.O,Oginni,B.O(2012)Kaizen Cost Management Techniques and Profitability

of Small and Medium Scale Enterprises in Ogan State Nigeria, Research Journal

Finance and Accounting ISSN 222-1697(paper)ISSN 222-2847 ,Vol 3 No 5

Soni ,G.Kodali ,R(2010)International benchmarking for assessment of supply chain

performance,Benchmarking:An International Journal ,Vol 17,Iss 1 pp44-76

Shah,H.M,Malik,M.S(2011)Strategic Management Accounting ,A Messiah for

Management Accounting .Australian Journal of Business and Management Research

,1(4)1-7

Shojaie,A.A ,Nasirion,B(2015)Identifying and Ranking factors that effect on supply

chain performance of trading companies in field of import.International Journal of

Scientific Management and Development Vol 3(1)776-783 January.

Stumm,S.V(2011)The Pross and Cons of using SPSS as a research tool to explore

individual differences:SPSS use Group Meeting York October 2011 University of

Edinburgh

Susan ,E.W(2014)Advantages and Disadvantages of Face to Face Data Collection

Tammela,I.A , Canen,G.p(2010)Time based competition related to logistics an

international study of furniture companies 10th

International Conference on industrial

logistics Proceedings of the international conference Rio de Janeiro Brazil pp 45-54

Tammela,I.A , Canen,G.p(2013)Time based competition ,Benchmarking An International

Journal Vol 20 Issue 5 pp588-606.

Thyer,B(2010)The Handbook of Social Work Research Methods 2nd

Eddition New

Delhi,Sage

83

Uddin,A.Md Factors Resposnible to Delears satisfaction:A study on Pattex Furniture

Industries ,World Journal of Social Sciences Vol 2 No 5 Issue pp 207 -217

Verma,J.P(2013)Data Analysis in Manu with SPSS software ,D01 10.1007/978-81-322-

0786-3_5,Springer India

Wardle .D(2011) What is an average survey response rate ? measuring satisfaction , A

blog about designing and Implementing customer and employee surveys Surveylab

Wyle,P,Sammis,J ,MacDonnell,K(2012)Logistic regression vs multiple regression

Zekiri,J and Nedelea ,A (2011).The Annals of the “Stefan cel Mare”University of

Suceava.Fascicle of The Faculty of Economics and Public Administration.

Zengin,Y ,Ada ,E(2010).Cost Management Through Product Design:Target Costing

Approach ,International Journal of Production Research ,48(19),5593-5611