The Role of Managerial Accounting in Strategic Decision-Making: A Case Study of First Bank of Nigeria
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Background of the Study
Managerial accounting plays a pivotal role in facilitating strategic decision-making by providing financial insights and data-driven analyses that support organizational goals (Horngren et al., 2023). In Nigeria's dynamic banking sector, characterized by increased competition and evolving regulatory frameworks, managerial accounting has become indispensable for decision-makers. First Bank of Nigeria, as a leading financial institution, operates in a complex environment requiring robust financial planning, cost control, and performance measurement systems.
The adoption of managerial accounting techniques, such as budgeting, variance analysis, and performance evaluation, equips organizations with the tools to navigate uncertainties, optimize resource allocation, and align strategies with long-term objectives (Kaplan & Atkinson, 2024). Managerial accounting also aids in risk management by identifying financial vulnerabilities and enabling proactive measures (Johnson et al., 2025). Despite its benefits, many Nigerian banks struggle with implementing effective managerial accounting systems due to resource constraints and inadequate training.
This study focuses on how First Bank of Nigeria utilizes managerial accounting to inform strategic decisions, ensuring sustainability and competitive advantage.
Statement of the Problem
The Nigerian banking sector faces challenges such as economic volatility, stringent regulatory requirements, and intense competition. These challenges necessitate effective decision-making processes supported by accurate and timely financial information (Obi & Adekunle, 2023). However, many banks, including First Bank of Nigeria, face issues such as inadequate cost control mechanisms, insufficient integration of managerial accounting tools, and limited emphasis on data analytics.
The problem is compounded by a lack of strategic alignment between financial data and organizational goals, which can result in suboptimal decisions and missed opportunities for growth (Okeke et al., 2025). Furthermore, the absence of tailored managerial accounting practices may hinder the bank’s ability to identify profitable ventures, manage risks effectively, and maintain financial stability.
This study seeks to evaluate the role of managerial accounting in strategic decision-making within First Bank of Nigeria, exploring how its adoption impacts organizational performance.
Objectives of the Study
- To assess the extent to which managerial accounting influences strategic decision-making in First Bank of Nigeria.
- To identify key managerial accounting tools used in the bank and their effectiveness in enhancing decision-making.
- To evaluate the challenges and opportunities associated with implementing managerial accounting practices in the banking sector.
Research Questions
- How does managerial accounting influence strategic decision-making in First Bank of Nigeria?
- What are the key managerial accounting tools utilized in the bank, and how effective are they?
- What challenges and opportunities exist in implementing managerial accounting practices in Nigerian banks?
Research Hypotheses
- Managerial accounting significantly influences strategic decision-making in First Bank of Nigeria.
- The use of managerial accounting tools enhances decision-making effectiveness in the bank.
- Challenges in implementing managerial accounting practices hinder its impact on strategic decision-making.
Scope and Limitations of the Study
This study focuses on First Bank of Nigeria's managerial accounting practices and their impact on strategic decision-making. The scope includes an examination of financial planning, cost management, and performance evaluation tools. Limitations include restricted access to proprietary financial data and potential biases in respondent feedback.
Definitions of Terms
- Managerial Accounting: The process of preparing and analyzing financial information to aid decision-making within an organization.
- Strategic Decision-Making: The process of determining long-term goals and objectives and identifying the means to achieve them.
- Cost Management: The practice of planning and controlling a company's budget to maximize profitability.
