ABC: adopters, supporters, deniers and unawares

Abstract

PurposeDespite the great interest in activity based costing (ABC), companies seem to be reluctant to adopt it. Our research aims at examining the rate of adoption of ABC by Greek companies that belong to all three sectors of the Greek economy, i.e. manufacturing, retail and services, as well as investigating the reasons that influence a firm's decision to change its current cost accounting system.Design/methodology/approachAn empirical survey via questionnaires was conducted during 2003 on a sample of 88 Greek leading companies and four company categories were identified in respect to their perceptions towards ABC (ABC adopters, ABC supporters, ABC deniers and ABC unawares).FindingsOur findings indicate that ABC diffusion in Greece is quite satisfactory. Furthermore, we present evidence that firms that have implemented ABC (ABC adopters) have experienced multidimensional management facilitating benefits from the system. However, the adequacy of resources was found to be the variable that is positively and statistically correlated with the majority of problems encountered during ABC implementation process. On the other hand, the companies that include ABC in their future plans (ABC supporters) seem to be familiar with the corresponding expected benefits and potential problems of its adoption. We present evidence that the possibility of future ABC adoption is related to the degree of satisfaction from the currently used cost accounting system. Companies that do not intend to adopt ABC (ABC deniers) were found to be more satisfied with their existing cost accounting system in comparison to ABC supporters. We also report the characteristics of companies that still have complete ignorance of the ABC technique (ABC unawares).Originality/valueThe paper not only proceeds in a thorough analysis of the benefits perceived in relation to ABC as they have been presented in similar research, but also moves a step further and groups these benefits into distinct categories as well as ranks them in order of perceived importance. Furthermore, it analyzes the basic characteristics of the firms that have complete ignorance of ABC (ABC unawares), a group that is rarely met in ABC research papers.