Second Order Confirmatory Factor Analysis Of Target Cost Management Of Micro, Small And Medium-Sized Enterprises (MSMES) In Thailand

Abstract

The main aim of this research was to analyze the second order confirmatory factor analysis of target cost management in micro, small and medium-sized enterprises in Thailand. The quantitative data collection (quantitative research) from 400 Micro, Small and Medium-sized Enterprises in Thailand through a Likert scale questionnaire. The key informants were accounting executives. Data were analyzed with second order confirmatory factor analysis by using Analysis of a Moment Structures (AMOS). Research results showed that the second order confirmatory factor of guidelines for target cost management in micro, small and medium-sized enterprises in Thailand consisted of 6 components: target price strategy, customer orientation, design process management, teamwork development, product life cycle cost management and value chain management. Analysis results of developed model were found corresponded to the evaluation criteria and fit to empirical data with 0.081 Chi-Square Probability Level, 1.160 of Relative Chi-Square, 0.955 of Goodness of Fit Index, and 0.020 of Root Mean Square Error of Approximation. Firms need to implement target cost management potentially to receive best business outcomes. They need to allocate their valuable resources, competencies, assets, and capabilities in supporting the implementation in a firm. As well, executives of firms need to search for new techniques, procedures, approach, and methods that can help firms gain a success of target cost management in the uncertain competitive markets and environments via effectiveness, efficiency, quality, and excellence of their practices, operations and activities.