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The diffusion of management accounting innovations : a study of the factors influencing the adoption, implementation levels and success of ABC

Al-Omiri, Mohammed Fawaz R. (2003) The diffusion of management accounting innovations : a study of the factors influencing the adoption, implementation levels and success of ABC. Doctoral thesis, University of Huddersfield.

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    During the late 1980s considerable publicity was given to the criticisms of management
    accounting. In response to these criticisms new innovations emerged. The innovation
    that has attracted the greatest interest has been activity-based costing (ABC). This study
    gathers empirical data to examine various issues relating to ABC derived from an
    extensive review and synthesis of the relevant literature, including the contingency
    theory literature. The major aims of the study are to investigate the extent to which
    various contextual factors influence the adoption of ABC systems, to determine the
    reasons and factors which have discouraged firms from adopting ABC and to examine
    the impact of various factors in determining the success of ABC systems. Other
    objectives include examining the importance of specific motives for implementing ABC
    systems and examining the extent to which other accounting innovations and strategic
    management accounting practices are associated with the adoption/non-adoption of ABC

    A postal questionnaire was conducted using 1,000 UK manufacturing and nonmanufacturing
    organisations with an annual sales turnover in excess of £50 million as the
    target population. Not-for-profit organisations were excluded from the population
    sample. The findings are based on 176 responses (a usable response rate of 19%).

    Strong support was found for the intensity of the competitive environment, size, extent of
    the use of lean production techniques (including JIT techniques), importance of cost
    information, extent of the use of innovative/strategic management accounting techniques
    and corporate sector having a significant influence in the adoption of ABC systems.
    Using factor analysis, three factors were found to be significantly associated with ABC
    success. They were managerial understanding and the ability to use ABC information,
    positive attitudes by accounting staff towards ABC and adequate training for ABC and a
    clear understanding of its purposes. The dominant motives for implementing ABC
    related to the deficiencies of the existing system such as the existing system not
    providing useful information to management, it was necessary to update the existing
    costing information system and the existing costing system was not reliable. The most
    important reasons for not implementing ABC were that the perceived benefits did not
    justify the cost of implementing it, most of the indirect costs were fixed, the existing
    system was considered satisfactory for controlling overheads and the general lack of
    support from top management or individuals to act as champions.

    A distinguishing feature of the study is that it overcomes the deficiencies of previous
    ABC studies that have used bivariate statistical tests. These studies have examined
    independently, without controlling for the impact of other variables in the model,
    whether the difference between ABC adopters and non-adopters are statistically
    significant in respect of each of the selected contextual variables. This study uses
    mutivariate binary logistical regression that systematically controls for the impact of the
    other explanatory variables that are likely to influence the adoption of ABC.

    Item Type: Thesis (Doctoral)
    Additional Information: EThOS Persistent ID
    Subjects: H Social Sciences > HF Commerce > HF5601 Accounting
    Schools: The Business School
    Depositing User: Graham Stone
    Date Deposited: 03 Jun 2009 13:57
    Last Modified: 28 Jul 2010 19:37


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