Abstract:

Activity based costing and related techniques (ABT) have been the centre of management innovation research  over  the last  two  decades.  Understanding  ‘ABC  Paradox’  was  the  main  motivation  for focusing on ABC in particular. Nevertheless, almost after three decades since ABC was introduced, the  extent  to  which  activity-based  techniques have  entered  the  mainstream  of  management accounting practices is not clear and the factors that affect their adoption and implementation are not determined (Baird et al., 2004; Brown et al.,2004). Baird et al., (2004) has linked this status of ABC  adoption  research  to  some  limitations  in  the  way  ‘ABC  paradox’  was  investigated. These limitations  include:  the  failure  to  recognize,  and/or  convey  to  survey  respondents,  the  different levels  at  which organizations  might  adopt  activity  based  techniques,  the  use  of  different  activity based  techniques  terms  across prior  studies  and  (mis)interpretation  of  the  term  ABC  by  the respondents  who  were  not  provided  with  a  clear definition  of  the  terms  used  in  prior  surveys. To overcome these limitations, Baird et al., (2004) adopted Gosselin’s (1997) three levels of activity management: activity analysis (AA), activity cost analysis (ACA) and activity based costing (ABC) and examined the extent of adoption of each of these levels. In addition, they explored the association between selected organizational factors and cultural dimensions and the extent of adoption activity management levels.