An Investigation into the Mixed Reported Adoption Rates for ABC: Evidence from Australia, New Zealand and the UK

International Journal of Production Economics, 2011

10 Pages Posted: 18 Sep 2011

See all articles by Davood Askarany

Davood Askarany

University of Auckland Business School

Hassan Yazdifar

University of Glasgow

Date Written: August 21, 2011

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).

Keywords: Activity-based costing, Diffusion of innovation, Contextual factors, Adoption processes

Suggested Citation

Askarany, Davood and Yazdifar, Hassan, An Investigation into the Mixed Reported Adoption Rates for ABC: Evidence from Australia, New Zealand and the UK (August 21, 2011). International Journal of Production Economics, 2011, Available at SSRN: https://ssrn.com/abstract=1929248

Davood Askarany (Contact Author)

University of Auckland Business School ( email )

12 Grafton Rd
Private Bag 92019
Auckland, 1010
New Zealand

Hassan Yazdifar

University of Glasgow ( email )

Main Building
Glasgow, G12 8QQ
United Kingdom
+44 (0)141 330 5666 (Phone)
+44 (0)141 330 4442 (Fax)

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