Problems with Activity-Based Costing Implementation in Polish and Lithuanian Companies

Abstract

The research purpose was to examine the problems of companies in implementing Activity-Based Costing and, in particular, to analyze the differences in assessing the level of these problems perceived by organizations using the system, considering its implementation, those which had not considered it, and those which had rejected it. The research showed that the problems with ABC implementation seen by adopters were considerably smaller compared to the other groups. A similar difference was noted between enterprises that were considering the implementation of the ABC system (and not considering it at all) and those that rejected it. The last group perceived implementation problems to be bigger than was the case in the groups which were still considering implementation or had not considered it at all. The findings seem to support the view that companies are making ABC implementation decisions rationally. On the one hand, when the problems perceived during implementation are relatively small, the company adopts ABC. On the other hand, when a company perceives the implementation problems as being quite significant, it rejects the implementation. In the middle of the scale are companies considering the implementation of ABC and others that are not thinking about it at all. They assess the perceived problems as moderate and are not in a position yet to decide for or against ABC implementation. There could also be an alternative explanation for the research results. It may be the case that companies, which have not implemented ABC overestimate the implementation problems.

Management accounting systems effectiveness, perceived environmental uncertainty and enterprise risk management: evidence from Jordan

“…In the light of recent economic crises that have affected the business environment, management accounting has become one of the most valuable sources of information in the business world, where the information generated by management accounting is focused on past and present records, as well as future perceptions (Pietrzak et al, 2020). Around the same time, throughout the increasingly unpredictable circumstances that companies encounter as a result of the dramatic developments impacting the market climate, a variety of academics and administrators have tried to evolve and establish approaches that can minimize ambiguity.…”

“…They also noted that, under increasingly unpredictable circumstances, traditional accounting information has little importance in minimizing ambiguity. Therefore, Pietrzak et al (2020) added that the continuous shifts in the business climate allow for the need to adapt and improve the company approach in accordance with global developments in the fields of research, culture, politics, technology and industry, whereby technical management engineers have concentrated on increasing the quality of the development process through simplicity. They also strongly advocated adopting approaches that will assist in the planning, monitoring and decision-making process (Shields and Shelleman, 2016) wherein management accounting was one of these approaches (Hariyati et al, 2019).…”

Activity-Based Costing (ABC) and Its Implication for Open Innovation

“…Nevertheless, some authors also point out some critical aspects, among them, Pietrzak et al [31], Stratton et al [32], Askarany and Yazdifar [33], and Bornia [34], who state that many organisations do not adopt the ABC system due to the complexity, difficulty, and cost involved in its implementation and maintenance. Kaplan and Anderson [22] highlighted the difficulty and complexity related to identifying the various activity drivers.…”

Activity-based costing (ABC) in SMEs and innovative initiatives: possible option or expired?

“…No obstante a ello, existen dificultades y problemas de implementación del sistema ABC por su complejidad, alto costo y falta de tiempo y recursos; en algunos casos, las empresas no han implementado ABC porque desconocen de sus bondades, o, sino, se sobrestima y subestima la capacidad de manejar sus costos directos e indirectos, y lo ven más complejos, rechazando su implementación (Pietrzak et al, 2020;Sorros et al, 2017).…”