This study aims to investigate the contingency relationships between three organizational contexts, namely, product customization, sustainable competitive advantage and environmentally clean products, and the adoption of product life cycle cost analysis (LCCA), along with its direct impact on financial performance.
A cross-sectional self-administered survey was conducted with a sample of 73 manufacturing companies. Two regression models were developed to examine how specific contingent factors influence LCCA adoption and evaluate the direct impact of LCCA adoption on financial performance.
The empirical results indicate that product customization, sustainable competitive advantage and environmentally clean products are significantly and positively related to product LCCA adoption and that product LCCA adoption is directly associated with enhanced financial performance.
The results of this study are based on data collected from a single country, which may limit the generalizability of the findings to organizations in other cultural contexts. Nevertheless, this study offers meaningful contributions to the theoretical development of the LCCA approach by identifying the situational factors that impact its adoption and practical effectiveness.
The findings of this study are expected to provide practitioners with valuable insights into the contextual factors that make LCCA adoption the most appropriate. These insights can support managers optimize cost management practices and enhance decision-making quality.
This study addresses a crucial gap in the literature by offering new insights into the determinants of LCCA adoption and providing empirical evidence on the positive effect of LCCA on financial performance.
