LEVERAGING MANAGEMENT ACCOUNTING TOOLS FOR STRATEGIC DECISION-MAKING AMONG SMALL AND MEDIUM SCALE ENTERPRISES (SMES) IN NIGERIA

Abstract

This study examined the use of management accounting tools (MATs) for strategic decision-making among Small and Medium Enterprises (SMEs) in Nigeria, with particular objectives on their extent of use, impact on performance, and the inhibiting factors limiting adoption. Guided by the Saunders research onion, a positivist philosophy and deductive approach were employed, using a cross-sectional survey design. Data analysis involved descriptive and inferential statistics via SPSS. The result is as follows: for Hypothesis 1, results indicated significant adoption of certain MATs, with high usage of strategic costing (M = 4.09, SD = 0.42, t(99) = 25.95, p < .001) and strategic investment (M = 4.17, SD = 0.44, t(99) = 26.45, p < .001), while competitor accounting (M = 2.90, SD = 0.35) and customer accounting (M = 3.01, SD = 0.41) were only moderately applied. Hypothesis 2 revealed a positive and significant effect of SMA on SME performance, with cash management practices strongly influencing ROI (β = 2.33, t(99) = 8.16, p < .001) and inventory management also significant (β = 0.42, t(99) = 2.43, p = .020), though overhead cost management was not significant (β = 0.07, p = .725). For Hypothesis 3, barriers such as lack of top management support (M = 3.32, SD = 1.44) and shortage of qualified personnel (M = 3.24, SD = 1.42) emerged as critical inhibitors. The study concluded that MATs significantly enhance strategic decision-making and performance in SMEs, though adoption is constrained by organizational and resource limitations. It is recommended that SMEs invest in capacity building for management accounting, government provide supportive policies and training initiatives, and SME leaders foster stronger top-management commitment to MAT usage.