The association between activity-based costing and improvement in financial performance

Cagwin, Douglass; Bouwman, Marinus J.

doi:10.1006/mare.2001.0175

Cited by 179 publications

(140 citation statements)

References 30 publications

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“…Cost saving mechanisms has a positive significant association with the implementation of ABC similar to the findings of Cagwin and Bouwman (2002) and James (2013). SMEs should be encouraged to incorporate cost saving techniques like JIT and TQM to improve the success of the ABC system to allow for continuous improvement.…”

Section: Discussionsupporting

confidence: 82%

“…As for the external environment, a five item scale was adapted from Hansen and Van der Stede (2004). A five item scale for cost saving mechanisms was adapted from Cagwin and Bouwman (2002). As for user attitude, a five item scale was adapted from Ismail and King (2007).…”

Section: Methodsmentioning

confidence: 99%

“…Kulmala, Kajuter, and Valkokari (2007) found that although SMEs in general did not focus on cost management tools nevertheless, MAPs such as the ABC system have allowed SMEs to better understand the links between activities, operating results and network cost, hence increasing cost awareness and prompting the use of the ABC method among SMEs. In the research by Cagwin and Bouwman (2002) on the improvement of financial performance with the use of the ABC system, the authors found that the usage of other cost saving mechanisms such as Total Quality Management (TQM) and Just in Time (JIT) used together with ABC contributed to the successful implementation of ABC. Furthermore, James's (2013) study in Jamaica on commercial and merchant banks found that the perceived ability of ABC to assist in cost control and saving allowed for the implementation of ABC.…”

Section: Relationship Between the Cost Saving Mechanisms And The Implmentioning

confidence: 99%

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Factors Influencing the Implementation of Activity-Based Costing: A Study on Malaysian SMEs

Nair¹,

Tan²

2018

IBR

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Literature has indicated that factors such as--the external environment, cost saving mechanisms, user attitude and company size--may have an effect on the implementation of activity-based costing (ABC). Furthermore, literature has revealed that there is still lack of research on the effect of these factors on the implementation of ABC among small and medium sized enterprises (SMEs) in Malaysia. As such the aim of this research is to test the relationships of these factors on the implementation of ABC among SMEs in Malaysia with the aim of contributing to existing research on the ABC system in the area of management accounting. A total of 200 respondents participated in this research. The results of the study revealed that all four factors; the external environment, cost saving mechanisms, user attitude and company size have significant relationships with the implementation of ABC among SMEs in Malaysia.

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Section: Discussionsupporting

confidence: 82%

Section: Methodsmentioning

confidence: 99%

Section: Relationship Between the Cost Saving Mechanisms And The Implmentioning

confidence: 99%

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Factors Influencing the Implementation of Activity-Based Costing: A Study on Malaysian SMEs

Nair¹,

Tan²

2018

IBR

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“…This paper draws conceptually on prior studies (e.g., Maiga et al 2014;Milgrom 1992;Milgrom and Roberts 1995), suggesting that the value of a resource brought to an organization might remain limited unless other complementarity factors are adopted and implemented as well. This suggests that, in a participative budget setting, there are indications that overall positive synergistic effects can be obtained through the support of ABC and ITEC (Cagwin and Bouwman 2002). Therefore, the aim of this study is to extend this line of research and to provide a better understanding of this area, by investigating:…”

Section: Introductionmentioning

confidence: 99%

Assessing the impact of budgetary participation on budgetary outcomes: the role of information technology for enhanced communication and activity-based costing

2014

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This paper addresses the long-standing question of how budgetary participation (BP) affects budgetary outcomes. Information technology for enhanced communication (ITEC) and activity-based costing (ABC) are taken into consideration as moderators that might affect the relationship between BP and budgetary outcomes in manufacturing firms. Based on moderated and polynomial regression analyses, the study's findings indicate that the main effects of BP, ITEC and ABC on budgetary outcomes are not significant, and that while ABC significantly moderates the relationship between budgetary participation and budgetary slack, ITEC does not moderate this relationship. Results also indicate that both ITEC and ABC significantly moderate the relationship between budgetary participation and managerial performance. These findings suggest that the effect of budgetary participation on budgetary outcomes can be contingent on ITEC and ABC although their impact varies with the nature of budgetary outcomes.

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“…ABC uses cost-drivers to allocate the costs of products and services (Banker et al, 2008). ABC not only improves the accuracy of product-and service-costing but also helps managers understand how resources are used through financial performance, such as return on investment and bottom line statements (Cagwin and Bouwman, 2002). Prior research on ABC has focussed on various aspects, including, for example the success of ABC (Anderson and Young, 1999;Foster and Swenson, 1997;Roberts and Silvester, 1996;Shields, 1995), ABC implementation (Gosselin, 1997;Krumwiede, 1998;Majid and Sulaiman, 2008;McGowan and Klammer, 1997;Chongruksut and Brooks, 2005), and the benefits and consequences of ABC (Ittner et al, 2002;Kennedy and Affleck-Graves, 2001;Swenson, 1995;Cagwin and Bouwman, 2002;Maiga and Jacobs, 2008).…”

Section: Introductionmentioning

confidence: 99%

ABC success: evidence from ISO 9000 certified companies in Thailand

Intakhan

2014

Asian Review of Accounting

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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.

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The association between activity-based costing and improvement in financial performance

Cited by 179 publications

References 30 publications

Factors Influencing the Implementation of Activity-Based Costing: A Study on Malaysian SMEs

Factors Influencing the Implementation of Activity-Based Costing: A Study on Malaysian SMEs

Assessing the impact of budgetary participation on budgetary outcomes: the role of information technology for enhanced communication and activity-based costing

ABC success: evidence from ISO 9000 certified companies in Thailand

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