Innovation Attributes Composite and Adoption of Activity-Based Costing (ABC) in Tanzanian Manufacturing and Service Sectors: The Mediating Role of Behavioral Preferences

This study was conducted to explore barriers to ABC adoption in the Tanzanian manufacturing and service sectors, notwithstanding its superiority over the traditional costing system. It went further to suggest solutions to such barriers by evaluating the mediating role of behavioral preferences on the causal relationship between the innovation attributes composite and ABC adoption. Based on the cross-sectional survey design, primary data were collected from a sample of 188 companies located in the Dar es Salaam, Arusha and Dodoma regions. Partial least squares structural equation modeling (PLS-SEM) revealed that none of the behavioral preferences positively mediated the causal relationship between the innovation attributes composite and ABC adoption at level 1. At level 2, the findings show that, it was the mediating effect by the perceived usefulness (p=0.001, β=0.238) only that was statistically significant. With the exception of the perceived ease of use, the mediating effects by perceived usefulness (p=0.009, β=0.018) and normative beliefs (p=0.045, β=0.016) were further confirmed to be statistically significant at level 3 of adoption. Moreover, the mediating effects by the perceived ease of use (p=0.039, β=0.123) and normative beliefs (p=0.005, β=0.115) were found to be statistically significant at level 4 of adoption. At the highest level 5 of ABC adoption, it was the normative belief (p<0.001, β=0.221) only that positively mediated the causal relationship between the innovation attributes composite and ABC adoption.