Abstract:
The present paper examines one set of potential reasons for the paradox as to why
so few firms have adopted activity-based costing (ABC) despite the demonstrated
benefits of this costing system. A cross-sectional survey of Australian
firms is used to examine the influence of seven technological and organizational
factors on firms' initial interest in ABC and their decision to adopt it or not. The
organizational factors of top management support, the support of an internal
champion, and organizational size were shown to be associated with initial
interest in ABC. The decision to adopt or reject ABC had one organizational
factor associated with it, the support of an internal champion.
