International, Peer reviewed, Refereed, Open access, Multidisciplinary Journal
Micro Small and Medium Enterprises (MSMEs) play a prominent role in the Indian economy by significantly contributing to employment generation, manufacturing output and exports. Due to the competitive nature of business, MSME's are constantly facing multiple challenges such as increasing input prices, limited access to funding and or the pressure to maintain product quality while keeping prices competitive. Cost control and cost reduction are two key cost-management measures to help MSME's improve their financial performance and operational efficiency. Cost control is concerned with keeping costs at or below predetermined limits while cost reduction is concerned with making permanent savings in cost without compromising the quality or the appropriateness of the good or service.
This paper uses a Systematic Literature Review method to study the existing research on the influence of cost control and cost reduction practices on the organisational performance of Indian MSME's. The literature review uses Indian based and international literature published and includes information from corporate reports and examples and cases studies pertaining to the MSME sectors. The research collates evidence on widely used techniques such as budgetary control, standard costing or costing standards, material management, lean methodologies and value analysis. It establishes the direct link that each of these cost management techniques has with operational performance indicators including profitability, cash flow, productivity and customer satisfaction.
The research findings indicate that Indian MSME's that have structurally embedded cost control and cost reduction practices have better financial stability, higher competitiveness, sustained growth. This paper concludes with suggecapability andr MSME owners, industry bodies and policy makers of implementing cost-management practices through affordable technologies, improving financial management capability, and developing a cost-conscious culture across all levels of the enterprise.
International Journal of Advanced Academic Studies
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