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Cost Accounting EssayQuestions arise as to why rudiment entrapuation is favored in certain companies and fails in others. Based on the contingency theory, searchers have argued that the reasons for different degrees of alphabet mastery could be due to the different contextual factors faced by each firm. These have led look forers to complete assessing factors that influence first rudiment success implementation as an important research atomic number 18a.The following are among the research that have been carried out to experience factors that influence alphabet success Anderson 18 resistance 3 McGowan and Klammer 19 Krumwiede 20 and Anderson and Young 21 This article has cardinal main objectives the first objective is to identify research gaps based on the revision of previous(prenominal) research and the second objective is to propose theoretical research framework for present-day(prenominal) research. This article is organized as follows Section II presents a discussion of selected articles related to to factors influencing first principle implementation and gaps or limitations of previous studies and suggestions for current research are stated in the section III and IV. The framework for current research is provided in section V, Section VI defines each research variable and the final section presents the conclusion. II. PREVIOUS look for In this section, selected first principle implementation empirical 144AbstractIn todays modernistic manufacturing and competitive environment, accurate personifying information is crucial for all the kinds of businesses, such as manufacturing firms, merchandizing firms, and serve firms. Argued to be superior to the traditional volume-based costing system, Activity-Based Costing system ( first rudiment) has increasingly attracted the attention of practiti mavenrs and researchers alike as one of the strategical tools to aid managers for better finding making.The benefits of rudiment system and its impacts on companies performance have motivate numerous empirical studies on first principle system and it is considered as one of the most-researched prudence accounting areas in developed countries. Previous research on rudiment have examined pertinent issues related to first rudiment implementation such as the levels of first principle adoption in variant countries, the reasons for implementing first rudiment, the problems related to rudiment and the critical success factors influencing ABC.This paper reviews the research on ABC carried out deep down the last decade, from 1995-2008, and from the review research gaps are identified. Specifically, this paper examines the selection of factors influencing successful ABC implementation, variables dod by previous research and the definitions and operationalization of the variables. The review reveals that outgoing research turn mainly on behavioral, organisational, and practiced variables as the main determinants of ABC success further very little research have been done to examine the roles of organizational culture and structure.Based on the research gaps identified, a research framework for future research is provided. Index TermsAdvanced Manufacturing Activity-Based Costing, ABC Success Environment, I. INTRODUCTION In todays competitive and continually changing business environment, firms motivation to be vigilant of the impacts of the changes in the business environment and devise appropriate strategies to survive and prosper. Advancements in manufacturing and converse technologies have drastically changed the ways businesses conduct their activities.Adoption of advanced manufacturing technologies such as robotics and computerized manufacturing have resulted in significant changes in the manufacturing cost structure which have led academics and practitioners to argue that the traditional costing methods are no longer sufficient within this parvenue manufacturing environment 1 (Johnson and Kaplan, 1987). This had resulted in the change from the traditional volume-based cost model to new costing methods such as Activity Based Costing (ABC) 2.Due to its cogency in providing more accurate costing information and enhancing firms performance, ABC is International ledger of Trade, Economics and Finance, Vol. 1, no(prenominal) 2, August, 2010 2010-023X studies, which spanned 1995-2008 periods, were collected from four prominent refereed accounting research journals, in prudence accounting field Journal of Management Accounting Research, Accounting, Organizations and Society, Management Accounting Research and British Accounting Review.Factors used by previous research to investigate the effect on ABC success implementation are summarized, and wooden leg of ABC implementation besides is outlined. A. Technical Variables Early studies of ABC adoption and implementation undertaken by previous researchers concentrated on technological factors, such as identification of mai n activities, selection of cost drivers, problem in accumulating cost data. Example of these research are Cooper 9, Morrow and Connelly 22.However, technical factors alone may not be adequate to explain the factors influencing ABC success implementation. Cooper et al. 23 argued that the key problem during ABC implementation stage is that companies only focus on technical factors. They suggested that to make ABC implementation more effective, non-technical factors such as liaison of non-accounting in ABC implementation process, top management championship, adequate formulation program to employees virtually the objectives and benefits of ABC should be emphasized as well.Similar opinions were expressed by Shield 3 and Shields and McEwen 14. Shield (1995) piece no significant family between technical factors and ABC success. Shields and McEwen 14 also eminentlighted that sole emphasis on the architectural and software design of ABC systems leads to the failure of ABC implementati on. Therefore many researchers have suggested that new variables should be considered to investigate factors influencing ABC success. B.Contextual, Behavioral and Organizational Variables Recognizing the research gaps in identifying factors that may instill ABC success, academicians shifted their focuses from technical factors to other variables, such as contextual, behavioral and organizational, culture, as well as organizational structure. Anderson 18 conducted a longitudinal investigation of ABC process in General Motor (GM) from a period of 1986 to 1993. In his research, he examined the effects of organizational variables and contextual variables, and segmented ABC implementation into four major stages, initiation, adoption, version and acceptance.He put that organizational factors, such as top management support and training for the ABC system affected various stages of ABC significantly, eyepatch contextual variables, such as competition, relevance to managers decisions an d compatibility with animate systems produced different degree of impact on different stages of ABC. Shield 3 examined the human family relationships between diversity of behavioral, organizational and technical factors and the success of ABC implementation.She employed Shield and Youngs 24 framework and summarized behavioral and organizational variables as top management support, adequate resources, training, contact lens ABC system to performance valuation and allowance, non-accounting ownership, link ABC to competitive strategies as well as clarity of ABC objectives. She found that top management support, gene linkage to quality initiatives and to personal performance measure (pay/appraisal), implementation of training and resource adequacy were the significant predictors in explaining ABC success.She also found that technical variables were not associated with ABC success. Shields findings are back up by other researchers, such as Shield and McEwen 14, who argued that a s ignificant cause for unsuccessful implementations of ABC of several companies could be due to the emphasis of architectural and software design of the ABC system and little attention given to behavioral and organizational issues, which were identified by Shield 3. Krumwiede and Roth 25 also stated that barriers of ABC implementation can be overcome if firms could give importance to behavioral and rganizational variables identified by Shield 3. Similarly, Norris 26 agreed with Shields 3 findings that the association between ABC success and behavioral and organizational variables is stronger than with technical variables.She further highlighted that the impact of behavioral, organizational and technical should be focused at individual level. McGowan and Klammer 19 conducted a scan of 53 employees from 4 targeted sites in the U. S. o examine whether employees satisfaction levels are associated with ABC implementation by They also measured their perceptions of the factors associated w ith the degree of satisfaction, such as top management support the degree of involvement in the implementation process objectives clearly stated objectives shared training linkage to performance evaluation system adequate resources information quality and preparer over user. Their results indicated that employees satisfaction with ABC implementation was positively related with clarity of objectives and quality of ABC information.Gosselin 15 carried out a survey of 161 Canadian manufacturing companies to examine the effects of strategic posture and organizational structure on adoption and implementation of general forms of Activity-based costing. He segmented the ABC implementation stage into adoption and implementation. The research findings showed that a prospector strategy was associated with manager decision to adopt ABC, while centralization and formalization were significantly associated with ABC success implementation. Krumwiede 20 surveyed U.S manufacturing firms to study how contextual factors, such as the potential for cost distortion or size of firms organizational factors, such as top management support, training or non-accounting ownership, affect each stage of ABC implementation process. His findings showed that the different factors affected the various stages of implementation of ABC and the degree of importance of each factor varies according to the stage of implementation. Contextual factors, such as usefulness of cost information, IT existence, less task uncertainty and large organizations were related to ABC adoption.Moreover, organizational factors, such as top management support, non-accounting ownership, and implementation training affect ABC success implementation. cxlv International Journal of Trade, Economics and Finance, Vol. 1, No. 2, August, 2010 2010-023X In another study by Anderson and Young 21, the relationship between organizational and contextual variables, such as organizational structures, task characteristics, management s upport, information engine room and ABC success was examined.The result confirmed the importance of organizational factors (top management support and adequacy resources) during the ABC implementation stage. In South Africa, Sartorius et al. 27 carried out a mail survey to investigate the effect of organizational factors such as top management, adequate resources, coherence with organizational goals and strategy on ABC success. They found top management support and resources were the crucial factors in explaining ABC success. In the UK, Innes and Mitchell 4 and 12 surveyed the extent of ABC adoption among largest firms.The study aimed to find out factors influencing ABC success by victimization behavioral and organizational variables, and it was found that top management influenced ABC success significantly. In another study conducted by Khalid 28 using a questionnaire survey among the largest 100 firms in Saudi Arabia, ABC adoption was found to be positively related to diversity of products. In Malaysia, Ruhanita et al. 29 conducted a mail survey and a incase study to examine that factors influencing ABC success, especially at adoption stage.They found the significant factors were cost distortion, decision usefulness, information technology and organizational factors. In addition, the findings showed that decision usefulness, top management support, link ABC to performance measure and compensation influenced the ABC success adoption significantly. A case study of one Chinese manufacturing firm was carried by Lana and Fei 30 in China. Their research aimed to examine some key success factors pertinent to ABC implementation within Chinese organizational and cultural setting.The research findings showed that top management support, hierarchical and communication structure and high proportion of dedicated professionals were the significant factors in determining ABC success implementation. Majid et al. 7 used a case study approach to describe the process of ABC implementation in a Malaysian service company and a Malaysian manufacturing company. In this research, they categorized ABC implementation into initiation and adoption, design, implementation and use of information.The purpose of the research was to find out the problems faced during ABC implementation, He found that the factors determining ABC success were top management support, suitable ABC software, and finally, ensuring that all affected employees understand and participate in the ABC implementation stage. And they also found that at different stages of ABC, the dominant factors influencing ABC success were also different. Colin et al. 31 adopted behavioral and organizational factors summarized by Shield (1995) to examine factors influencing the adoption and degree of success of ABC systems and determinants of that success.In their research, the targeted research population was manufacturing and service firms in the UK. They found that top management support, non-accounting ow nership, adequate training provided to ABC determined the ABC success. Besides behavioral, organizational and technical variable, some researchers also indicated that the attributes of national cultures could affect the level of ABC success 32, 33. Brewer 32 used Hofstedes taxonomy of work-related cultural values to examine the relationship between national culture and Activity-Based Costing system.In the study, Hofstede 34s work was applied to the case of Harris semiconducting material (HS), which has implemented ABC at plants in Malaysia and the USA. The results showed that the level of ABC success in Malaysia was higher than that of U. S due to high-power-distance and collectivist cultures in Malaysia. In addition, Supitcha and Frederick 33 also included national cultures dimension into framework in a case study of one Thai state-owned enterprises budgeting system.They found that due to cultural differences, modifications were required when the organizations in Thailand tried t o implement ABC system in Thai environment. Apart from national culture, corporate culture factors were also tested by prior research. Baird, Harrison and Reeve 17 conducted a study to investigate the relationship between the extent of ABC adoption and the organizational variables of size and decision usefulness of cost information and business unit culture. In their research, data were collected by a mail survey questionnaire and samples were randomly selected from business units in Australia.The research finding showed significant relationships between ABC adoption and decision usefulness, cultural dimensions of outcome druthers and tight verse loose control. Baird, Harrison and Reeve 16 examined the relationship between success of activity management practices and organizational factors (top management support, training, link to performance evaluation and compensation, and link to quality initiatives), and organizational culture (outcome orientation, team orientation, attention to detail, as well as innovation).They adopted a survey questionnaire method on randomly chosen business units in Australia. The findings showed that two organizational factors (top management support, link to quality initiatives) explained the variations in success of activity management practices, such as ABC, and outcome orientation and attention to detail of organizational culture were associated with ABC success. They also stressed that compared with organizational culture, organizational factors had stronger associations with the ABC.