Target Costing: A Strategic Management Accounting Tool for Enhancing Institutional Competitiveness

The study examined target costing as a strategic management accounting tool for enhancing institutional competitiveness. In the context of financial targets and target control, the study investigated the awareness and application of target costing among top performing and highly ranked Nigerian Private Universities. The sample frame is accredited private universities. To ensure regional diversity for the scope of the study, universities were selected from the southwest, North-Central and North-East. The study adopted purposive sampling techniques to arrive at top Five (5) private universities who have consistently ranked high by the annual university ranking systems. Primary data for the study were gathered through questionnaire administered to Vicechancellors, Registrars, Bursars, Directors and Student Alumni. The study employed Partial Least Square Structural Adjustment Model (PLS-SEM) to test the hypothesis arising from the objectives of the study. Against the 0.5 threshold, the results indicated significant relationships between target costing strategies and institutional competitiveness as Financial Targets shows strong indicator loadings (0.872, -0.991, 0.863) for cost savings, specific targets, and tuition budgets, while Targets Control demonstrates robust loading (0.999) for target review updates. Several measures exceed the 0.5 threshold to validate the parameters as reliable indicators of competitiveness. It was concluded that, while strong target control mechanisms is crucial for competitiveness, overly rigid financial targets may be counterproductive. Universities should focus on flexible, adaptive target control systems rather than strict financial constraints to enhance their competitive position, and equally institutionalize comprehensive targets control frameworks, leveraging periodic reviews and real-time adjustments to review cost strategies.