An investigation into the mixed reported adoption rates for ABC: Evidence from Australia, New Zealand and the UK

An investigation into the mixed reported adoption rates for ABC: Evidence from Australia, New Zealand and the UK

0.00 Avg rating0 Votes
Article ID: iaor201110616
Volume: 135
Issue: 1
Start Page Number: 430
End Page Number: 439
Publication Date: Jan 2012
Journal: International Journal of Production Economics
Authors: ,
Keywords: Australia, costing, literature survey, New Zealand, UK, ABC analysis
Abstract:

An accumulated body of the literature confirms that the adoption of activity‐based costing (ABC) can lead to a substantial improvement in organisational performance, productivity and profitability, and therefore encourages further adoption of the technique. However, studies investigating the diffusion of ABC have reported inconsistent and mixed results. This could cause uncertainty for many potential adopters of ABC (especially for those who follow the fashion and fads approaches) and influence their tendencies towards the adoption of ABC in the future. Addressing the diffusion process as a contextual factor, this study simultaneously investigates the adoption of ABC from the perspectives of different diffusion processes. Using two commonly adopted diffusion processes (the stages of adoption and the levels of adoption), this study examines the relationship between the reported adoption rates for ABC and the diffusion process approaches chosen to measure its adoption rates in three western countries: Australia, New Zealand and the UK. A similar questionnaire was used and more than 2000 qualified CIMA members (via a survey study and follow‐up interviews) were targeted. The findings suggest a significant association between the reported adoption rates for ABC and the diffusion process approaches chosen to measure the adoption rates. The findings further suggest that the lack of a common understanding of ABC systems may have also contributed to the mixed reported adoption rates for ABC, as many ABC adopters have considered themselves adopters of traditional accounting systems by mistake (especially when they are dealing with ‘facility costs’ as one of the main cost hierarchies under ABC systems).

Reviews

Required fields are marked *. Your email address will not be published.