ABC success: evidence from ISO 9000 certified companies in Thailand

Abstract

Purpose – The purpose of this paper is to examine the success of activity-based costing (ABC) implementation by confirmatory factor analysis of ISO 9000 certified companies in Thailand. Design/methodology/approach – A structured questionnaire was used to collect data from key participants, accountant managers in ISO 9000 certified companies. Findings – The study confirmed the six constructs for the sample of 102 key participants. The results indicated that ABC implementation success in the context of ISO 9000 certified companies in Thailand consists of upper-management support, ABC system training, non-accounting ownership, links to quality initiative, adequate resources, and links to performance evaluation. Originality/value – The findings have significant implications for ISO 9000 certified companies which intend to adopt or implement ABC. Past findings on ABC implementation success have a small-sample size so they are of limited usefulness. This research has a larger sample size and more carefully chosen participants and so the generalizations are more acceptable.

ISO 9000, activity based costing and organizational performance

“…Furthermore, research findings in both the quality management literature and the management accounting literature indicate that extensive use of ISO 9000 and ABC respectively may positively impact organizational performance (Naveh and Marcus, 2005;Banker et al, 2008;Jain and Ahuja, 2012;Maiga, 2014;Miryazdi and Jusoh, 2015;Kusumah and Fabianto, 2018). Additionally, literature suggests that there could be several interactions between ISO 9000 and ABC that could enhance each other's value and effect on performance, mainly in the area of information exchange (Intakhan, 2014). Thus when viewed from the perspective of complementarities in organizations (Milgrom and Roberts, 1995;Ennen and Richter, 2010), the features of ISO 9000 and ABC and the existence of interactions between them indicate that ISO 9000 and ABC could be complementary.…”

Impacts of activity-based costing on organizational performance: evidence from Thailand

“…financial or non-FP improvement. Our work is therefore complementary to Intakhan (2014) but different from it. In fact, we found no published research in Thailand examining the impact of ABC on OP.…”

“…More recently, Nimtrakoon and Tayles (2015) revealed adoption of ABC by 96 companies from the Stock Exchange of Thailand and show that Thai firms reported greater benefit from the use of ABC to make judgments about the costs and benefits of their differentiation strategy. Additionally, Intakhan (2014) explored antecedents to perceived successful implementation of ABC in 102 Thai ISO 9001-certified companies. The work explored the contextual, organizational and behavioral variables including top management support, ABC system training, non-accounting ownership, links to quality initiatives, adequacy of resources and links to performance evaluation; the first four factors were identified above as the strongest drivers of ABC success.…”

“…The work explored the contextual, organizational and behavioral variables including top management support, ABC system training, non-accounting ownership, links to quality initiatives, adequacy of resources and links to performance evaluation; the first four factors were identified above as the strongest drivers of ABC success. Intakhan (2014) asked respondents to what extent the implementation was a success, ranging from very poor to very good. Success here being the respondents' perception of “the degree to which management uses ABC information … in order to improve financial performance” (p. 288).…”

Employees’ Perception of the Implementation of Activity-Based Costing in Cattle Feedlot Company

“…examines the critical factor that influence the successful and failure of ABC implementation. Sohal and Chung (1998) founds that total commitment from top management is the success factor, Chong and Cable (2002) has different about the success factor that project team well organized and advised andChongruksut and Brooks (2006),Majid and Sulaiman (2008) andIntakhan (2014) result research is top management support is the success factor of implementing the ABC system.…”