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

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  • Askarany, Davood
  • Yazdifar, Hassan

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).

Suggested Citation

  • Askarany, Davood & Yazdifar, Hassan, 2012. "An investigation into the mixed reported adoption rates for ABC: Evidence from Australia, New Zealand and the UK," International Journal of Production Economics, Elsevier, vol. 135(1), pages 430-439.
  • Handle: RePEc:eee:proeco:v:135:y:2012:i:1:p:430-439
    DOI: 10.1016/j.ijpe.2011.08.017
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    Cited by:

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    2. Tandung Huynh & Guangming Gong & Huyhanh Huynh, 2014. "Suggest Solutions for Diffusion and Implementation of Activity-Based Costing In Vietnam," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 4(2), pages 173-182, February.
    3. Chu-Lun Hsieh & Wen-Hsien Tsai & Yao-Chung Chang, 2020. "Green Activity-Based Costing Production Decision Model for Recycled Paper," Energies, MDPI, vol. 13(10), pages 1-23, May.
    4. Shu Feng & Chun-Yu Ho, 2016. "The real option approach to adoption or discontinuation of a management accounting innovation: the case of activity-based costing," Review of Quantitative Finance and Accounting, Springer, vol. 47(3), pages 835-856, October.
    5. Davood Askarany & Hassan Yazdifar & Kevin Dow, 2021. "B2B Networking, Renewable Energy, and Sustainability," JRFM, MDPI, vol. 14(7), pages 1-13, June.

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