Improving competitiveness in education institutes – ABC’s neglected potential

Abstract

Purpose Because of the education sector’s evolution, accounting initiatives are required regarding competitiveness. Activity-based costing’s (ABC) neglected potential as a cost strategic tool initiated this research, which aims to identify administrative and operational factors that support or hinder its implementation in educational institutions as a predictor of competitiveness. Design/methodology/approach A theoretical model was proposed and tested through structural equation modeling to identify relationships between accounting departments, cost procedures, the transmissibility of information and competitiveness. Using quantitative and qualitative methods, a scale of items was derived, denoting an institute’s cost strategy and ABC implementations and returned from 417 Greek education institutes. Findings An accounting department’s role in accurate data transmissibility and an institution’s organizational structure significantly affect cost-related competitiveness. The importance of information sharing is strengthened by current cost allocation capabilities and the accounting department’s influence on management. Research limitations/implications ABC’s limited implementation in the Greek education sector complicated the theoretical model’s construction, as a variety of geographical and institutional factors were taken into consideration. Practical implications Customer value provides a competitive advantage and constitutes the basis of solid price strategies. Research demonstrates ABC’s importance for education institutions’ competitiveness and resource exploitation. Social implications Education’s commercialization urges costing strategy prioritization. ABC could benefit competitiveness and attract long-term funds and investments. To create value institutions, the allocation of incurred costs to added-value activities is crucial. Originality/value This study sheds light on vague issues institutions face when dealing with ABC. Understanding accounting departments’ influence shows ABC’s feasibility even for smaller or less efficiency-oriented education institutions.

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