The Role of Cognitive and Affective Conflict in Early Implementation of Activity-Based Cost Management

Abstract

Activity-based cost management (ABCM) can provide improved information for strategic decisions such as product planning and cost management. While ABCM has been increasingly adopted there is evidence that, for some organizations, promised gains have not eventuated. It appears that the main difficulties in adopting ABCM derive from implementation issues rather than the technical design of the systems. This study examines the role of conflict in ABCM implementation. It is argued that attention to ABCM behavioral implementation enhances cognitive conflict that is then associated with successful ABCM applications, specifically the usefulness of ABCM for product planning and cost management. Lack of attention to these factors generates affective conflict that is associated with less successful applications. Results of an empirical study of 56 managers indicated that cognitive conflict intervenes between ABCM behavioral implementation factors and beneficial outcomes. However, while there were significant negative associations between affective conflict and beneficial outcomes, there were no significant associations between behavioral implementation factors and affective conflict.