Managers divided: Implementing ABC in a Portuguese telecommunications company
By M. Major, Trevor Hopper. 2005
148 citations recorded by the source corpus.
Abstract This paper reports a case study of implementing activity-based costing (ABC) in a Portuguese telecommunications firm. It proved problematic. Production engineers were reluctant to use ABC, being skeptical about its accuracy and usefulness. Workers resisted ABC by inputting inaccurate data late. Production managers tolerated this. Production personnel had difficulty understanding ABC, relating it to their jobs, and feared it would add to work intensification and redundancies. In contrast, commercial managers, responsible for pricing and investment, and senior managers were satisfied with ABC. They believed it was more accurate than previous systems, met the requirements of regulators and financial markets, and eased consolidation of accounts. They used ABC data for decisions despite its problems. The results were consistent with factor and process-based research on ABC implementation. For example, top management support and generous resources help explain why the project was evaluated favourably outside of production. User involvement and ownership of the project was high but the prioritisation of commercial over production needs, and education and training delays fuelled conflicts between commercial and production managers. Given inter-professional rivalries and production managers’ token commitment to implementing ABC it is questionable whether ABC could ever have been effective within production. The case confirms that evaluations of ABC implementations can vary at operating and corporate levels, and industrial relations and worker resistance are major issues. It is argued studies of ABC implementation should incorporate issues in labour process research to explain consent and resistance.
Subfields: Management Information Systems, Management Science and Operations Research
View Paper: https://www.semanticscholar.org/paper/5c744d66726a3b17446954136145cd1b8a1a96dc
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In Management Information Systems
In Management Science and Operations Research
Citations in the corpus
- Extending Institutional Analysis through Theoretical Triangulation: Regulation and Activity-Based Costing in Portuguese Telecommunications (2007, background): “Encouraged by a previous tentative venture at triangulation (Major and Hopper, 2005); calls for an end to ‘paradigm wars’ in management accounting research;(5) and discovery of interesting work on theoretical triangulation (see Academy of Management Review, October 1989 and October 1999) neglected b”
- The Importance of the Internal Information Environment for Tax Avoidance (2015, background): “Potential barriers to improving IIQ include a lack of buy-in from lower levels (Major and Hopper, 2005), employees interpreting the change as a threat (Argyris and Kaplan, 1994), and a lack of support from departments that are bearing costs but not reaping benefits (Burns and Scapens, 2000).”
- The effect of organizational life cycle stage on the use of activity-based costing (2007, background): “For instance, earlier studies report that employees may have different views on the definition of activity-based costing (e.g. Cobb et al., 1992; Innes and Mitchell, 1993, 1998; Malmi, 1997; Major and Hopper, 2005).”
- On the emergence of strategic management accounting: An institutional perspective (2009, background): “A common assumption underlying this was that in the private sectors, market forces would prevail (Meyer and Rowan, 1977; Scott, 2001; Major and Hopper, 2005).”
- Control and change - Analysing the process of institutionalisation (2007, unknown): “The decoupling of MCS can be an organisational response to institutional demand but also an attempt developed by internal coalitions to resist the new logic (Townley, 1997; Basu et al. , 1999; Burns and Scapens, 2000; Major and Hopper, 2005).”