An Empirical Study of Activity-Based Systems in Ireland

Abstract

A survey of large manufacturing, service and financial sector organisations was conducted to investigate the current state of adoption of activity-based systems in Ireland. The findings showed higher rates of adoption than previously reported, fewer companies still considering implementation, and a high and relatively stable proportion of companies that have not considered implementation. Adoption rates were also higher than those reported in comparable studies elsewhere. Companies that have rejected activity-based costing/management (ABC/M) and those still considering ABC/M identified cost-benefit issues as a major consideration and tended to adopt a narrower view of ABC/M benefits than the range of uses reported by ABC/M users. There was also evidence of misconceptions among some of the non-adopters regarding the suitability of ABC/M systems in particular operating environments. Reported usage in specified areas of application was strongly correlated with perceived success in those areas, while usage and success in specified areas showed varying degrees of correlation with perceived overall success levels. In total, the findings do not support suggestions in the literature that ABC/M adoption rates in Ireland are low by international standards, but they do provide tentative evidence that adoption of ABC/M may be approaching a relatively settled state in the lrisli corporate sector.