Cultural influences on the ABC implementation in Thailand’s environment

Abstract

The activity‐based costing (ABC) system of the USA has been adopted by organizations in Thailand and elsewhere. Many cross‐cultural studies provide evidence that, because of cultural differences, successful accounting techniques and practices in one country need to be modified for effective use in another country. Using in‐depth interviews and questionnaires, this study examines the effects of cultural differences on the resistance against the ABC system in the Electricity Generating Authority of Thailand (EGAT), the Provincial Electricity Authority (PEA) and the Metropolitan Electricity Authority (MEA) – the three largest state enterprises in Thailand. It finds that the resistance is high for a system that causes empowerment and redistribution of power. This finding is different from what was found for the USA. The difference can be explained by cultural differences, especially in the power distance dimension, in the two countries. So, Thailand’s implementation of the ABC system must recognize this fact, and system modifications are necessary.