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Johnson and Kaplan (1987) believe that the demand to record information on commercial view has existed for as long time as people have traded. Hannay (2003) asserted that the key development in the history of accounting was the invention of double-entry bookkeeping. Historically, we know that double-entry bookkeeping emerged in Italy about thirteenth century. But cost accounting is not as old as double entry bookkeeping. It is quite recent system that emerged in nineteenth century, and developed by twentieth. Cost accounting is a system which measures the cost of product or services. Moreover, the demand for management accounting information is a much more recent phenomenon. Management accounting is a part of the financial reporting process and it concerning the activities of managers. Management accounting utilizes cost accounting information and analyses and uses them in many important management functions.
Johnson and Kaplan (1987) asserted that cost accounting was one of the consequence industrial revolution and take measures concerning the products costs. Traditional cost accounting system has used in a most of manufacturing and services firms from eighteenth century. They believed that the manufacturing firms developed cost accounting for two purposes: to control the internal processes and activities that generated those higher returns, and to evaluate internal opportunities to gain from their resources.
They asserted that management accounting first appeared in the United States and developments occurred during the nineteenth century. They believed that most important management accounting practices was emerged before 1925 and after this time it seemed the development stopped. They indentified accounting practices that introduced before 1925 and they have used until now included: variance analysis for labor, material, and overhead, standard cost, budgeting for cost, income and cash, flexible budgets, return on investment (ROI), Due Pont, transfer pricing, and sale forecasts.
In a sense, cost accounting measures the cost of product or services and its information is used for management accounting purposes in financial reporting process as well as in decisions making process such as sell or buy decisions, transfer pricing, value inventory, cost control, and performance determination.
At the beginning, cost accounting system was used for providing information on labor cost per unit of output, then, it mentioned to other components of cost (material and overhead). Traditional costing systems (TCS) were designed for manufacturing environments which direct costs were a larger percentage of total costs. This system allocates overhead costs to products, using on volume-based measurement relating direct cost like for example direct material cost, machine hours and direct labor hours. Although its overhead cost allocation was not quite accurate, this system worked well, since direct labor and material, represented the majority of the total cost while overhead cost was only a small fraction. But for past three decades, many companies have experienced significant changes in their cost structure. Overhead cost has increased impressively and has become the dominant cost component of many products. Many researchers highlight the change of cost structure for example Baker (1994)asserted that today direct labor cost is often less than 15% of the total cost and overhead cost may present 50% or more of total cost. During the same time period, much criticism was raised that traditional cost accounting has failed to prepare advance related, on time, and extremely accurate information for improving management decision.
To overcome the weakness of traditional cost accounting, several management accounting innovations have been introduced during 1980s and 1990s. Björnenak and Olson (1999) recognized the main cost and management accounting innovations based on their importance in the literature including: Activity- based management(ABM); activity-based costing(ABC); local information system (LS); balanced scorecard (BS); life cycle costing (LCC); target costing (TC); and strategic management accounting (SMA)". Moreover Chenhall and Langfield-Smith (1998) introduced the most popular recently cost and management accounting innovations in Australia including: product life cycle, valued added concepts, balanced scorecard techniques, total quality management, strategic management, risk management, benchmarking, economic value added, target costing analysis, and activity-based costing as methods for connecting strategy and objectives in companies.
The current study attempts to predict and tests the influence of certain contextual factors on implementation stages, adoption, and infusion activity-based costing (ABC) among the Iranian manufacturing firms.
Gosselin (1997) claimed that ABC is one of the most important management accounting innovations of the twentieth century .Main different between ABC and TCS is in the measurement of the component of cost. TCA measure the cost based on three components including: direct material, direct labour, and overhead but in ABC system, cost of products included activities. Another difference related to way for assigning overhead cost to product. ABC provides more detailed tracking and differential assignment of overhead costs, creates more costs pools, and provides more accurate product costs.
Krumwiede (1998b) defined activity-based costing (ABC) as a costing methodology that allocates costs to individual activities based on more than one cost allocated base. Spedding and Sun (1999) believed that the ABC method of accounting involves the breakdown of a system into individual activities and costing of amount of time and resources spent on each activity in the manufacture of product.
The careful reader of literature text is likely to be amazed to note how the basic techniques of activity-based costing system have been with us as long time as those of traditional costing method. Johnson and Kaplan (1987)found that technique similar to what is known as ABC around 1925 introduced. According to Kiani and Sangeladji, (2003) "Activity Accounting" was first introduced and used in 1940s and the concept, with some modifications, has been presented in literature as "Activity-Based Costing" (ABC). Evidence showed similar methodology introduced by researchers before 1980s but in early 1980s articles began to appear in the literature highlighting the concerns with inaccurate product costs resulting from traditional product costing systems. It seems implementation of activity-based costing was infeasible before the appearance of modern computer technology and software. However, changing the kind of products from simple to variety product, the market from local market to global market, and processes of production from simple process to complexity process were other important reasons that increased the value of accurate cost information and using ABC. It means the complexity requires more organizational activities and each activity has different cost allocations which the TAC system failed to analyze them. Activity besed costing as a cost accounting system has own management accounting named activity-based management (ABC). Some researchers named both together activity-based cost/management (ABCM) as a whole system.
More recently, Askarany et al., (2007) identified activity-based cost/management (ABCM) as one of the main cost and management accounting innovations. Meanwhile, Abernethy and Bouwens, (2005) defined management accounting systems (MAS) innovations as a either new systems or the redesign of an existing system. Activity based costing in this study is referred to as an innovation and considered to ABC as an administrative innovation (in compare to technical innovation). However, the current study follow the theory that used by the most of ABC adoption research, which has named the theory of organizational adoption of innovation or innovation diffusion theory. This theory is a widely accepted theoretical basis for studying ABC implementation (Anderson, 1995; Innes and Mitchell, 1995; Gosselin, 1997; Innes et al., 2000; Joshi, 2001; Brown et al., 2004; Pierce, 2004; Cohen et al., 2005; Maelah and Nasir Ibrahim, 2006; Al-Omir and Drury, 2007; Askarany et al., 2007).
ABC is a new type of cost accounting system and it is one of the main cost and management accounting innovations system in the twentieth century (Shields, 1995; Anderson, 1995; Gosselin, 1997; Askarany et al., 2007). Bjørnenak (1997) believed that one of the most important contemporary accounting innovations is activity-based costing. One of the objectives of the innovative management accounting systems is to assist managers to implement their companies' strategic priorities. All of the MAS innovations in directed at improving understanding of the profitability of products and enhancing processes to improve profits.
Instead of using a single basis to assign costs to products, ABC allocates costs to activities and then to products based on how the product consumed the resources (costs). Changing the methods of cost allocating and tracing by using ABC provides a clearer describe of cost of processes and shows the profitability of customers and products.
Since the emergence of activity-based costing (ABC), it has received a great deal of attention as a cost management innovation which provides more accurate product costs information than traditional cost system (e.g. Drucker, 1995; Turney and Stratton, 1992: Krumwiede, 1998b). Kiani & Sangeladjiai (2003) believed that never in the accounting history has an idea such as activity-based costing moved so quickly from concept to implementation. The increased interest in ABC is well documented in the literature.
In the line of improvement of ABC and towards restoring the principle of causality, new generations of ABC introduced by researchers named time-driven ABC system (TDABC), and performance-focused ABC system (PFABC) and it seems its improvement will continue (Merwe, 2009; Namazi, 2009). Attewell (1992) observed that most statistical studies on innovations have used two distinct perspectives for analysis: adoption and infusion. But this study attempt using one more distinct perspective for analysis: implementation stages. Adoption studies using the adoption perspective evaluate the characteristics of an organization that make it receptive to innovation and change. Infusion studies using the infusion perspective attempt to understand why and how an innovation spreads and what characteristics of the innovation lead to acceptance. Implementation stages studies investigate which conceptual factors affected companies to go to higher stage of ABC implementation process. The similar functional between cost management innovations adoption was proposed by several researchers.
On the other hand, Iran economic is severely disrupted additionally by years of upheaval and uncertainty surrounds the economical activities. These conditions were started by the war with Iraq. After the war with Iraq ended, the situation began to improve but because of Iran have not abandon its nuclear program, USA and European Countries still enforces the boycott and embargo on Iran. And also from 2006 to 2008 the international community passed four resolutions apposite Iran. Number of researchers found evidence that inflation leads to higher uncertainty in Iran (Samimi and Motameni, 2009; Heidari and Bashiri, 2009). In addition the relationship between perceived environmental uncertainty (PEU) and the adoption, infusion and implementation stages of ABC have not tested in one time. In this condition this study attempts to fill this gap by investigating the effect of high value of PEU in Iran on ABC adoption, infusion and implementation stages and also expected the perceived environmental uncertainty play important role in these three distinct perspectives of using ABC system.
This dissertation predicts and tests that how certain contextual factors influence implementation stages, adoption, and infusion activity-based costing (ABC) among the Iranian manufacturing firms. Meanwhile, this dissertation investigates the effects of using activity-based costing (ABC) on financial and non financial performance in the firms.
1.1. Problem Statement
The survey researches on ABC studies highlight that using ABC may present immense benefits. For example some researchers indicated that using ABC demonstrated benefits as follow: more able to measure cost accurately, better understanding of product costing, and develop performance measurements (e.g. Kiani and Sangeladjiai, 2003; Khalid, 2005), better understanding for cost reduction opportunities, improves managerial decision, provision of better cost control, and higher levels of satisfaction with their organizations costing system (e.g. Moll, 2005; Brent, 1992), improving the accuracy of cost measured for different products and services by more accurately assigning direct cost, usefulness of cost information for decision (e.g. Clausen, 2002; Cooper and Kaplan, 1992), providing a reliable indication of long-run variable product cost which is particularly relevant to, managerial decision making at a strategic level (e.g. Sohal and Chung, 1998).The concern can be turned to whether using ABC increase organizational performance.
However, existing literature shows despite the claim benefits of using activity-based costing; the level of implementation of this system is still lower than traditional one. Gosselin (1997) describes this fact as "ABC paradox". He asserted it seems a gap exists between great interest of management accountants for using ABC and the number of organizations that actually implemented it. In Iran for example Tabrizi (1999) surveyed CFOs of 290 manufacturing firms and found that a few Iranian manufacturers adopted ABC to calculate product costs. For solving ABC paradox and filling such gap the extant literature tested many factors that influenced the adoption of ABC (e.g. Gosselin, 1997; Innes et al., 2000; Cohen at al., 2005).
Hence, this study aim to examine the impact of perceived environmental uncertainty with other certain contextual factors on implementation stages, adoption, and infusion ABC among the Iranian firms and also to test the effect of using ABC on organizational performance, because no other study demonstrated these observations from the extant literature.
1.2. Research questions
1.2.1. General research questions
Today, companies face to the intense competitive market. In this environment, every company attempts to utilize accurate cost information. The extant literature emphasizes that using ABC may present immense benefits (e.g. ABC may improve the accuracy of cost measurement and provide useful cost information).The main purpose of current study is to examine the relationships between certain contextual factors and implementation ABC system and also the effect of using ABC on firm performance. More generally, the research question may be stated in the following manner: what factors do determine the implementation ABC system by Iranian manufacturing firms? Is firm performance influenced by using ABC system? General research questions are;
1) What factors determine the implementation stages, adoption, and infusion ABC by Iranian manufacturing firms?
2) Do the adoption and infusion ABC improve firm's financial and non financial performance? Do the Iranian firms that are in higher implementation stages of ABC have greater levels of financial and non financial performance than lower stages?
1.2.2. Specific research questions
Informing work in the area of ABC by current thinking in innovation diffusion theory, and allied literature streams, a theoretical model for implementation stages, adoption, and infusion ABC among the Iranian firms is developed to answer the following research questions:
1) What are the certain contextual factors that affect the implementation stages of ABC system in Iranian manufacturing firms?
2) Is the degree of importance for each ABC adoption factors qualifying by ABC implementation stages?
3) Do the Iranian manufacturing firms that are in higher ABC implementation stages of ABC have greater levels of financial and non financial performance than firms in lower stages?
4) What are the certain contextual factors that affect the adoption of ABC system in Iranian manufacturing firms?
5) Is there any improvement in level of organizational performance (financial and non financial) for Iranian manufacturing firms that adopted ABC, compare with non-adopters companies?
6) For Iranian manufacturing firms that have adopted ABC, is infusion of ABC system effect by same contextual factors in the ABC adoption and other certain organizational factors?
7) For Iranian manufacturing firms that have adopted ABC, is there any improvement in level of organizational performance (financial and non financial) for infuser, compare with non infuser companies?
1.3. Research objective
1.3.1 General research objectives
Most especially, the purpose of this study is to test the relationships between certain contextual factors and ABC adoption and also examined the effect of using ABC on firm performance. The general purposes of this study are:
1)To investigate whether the implementation stages and adoption ABC for Iranian manufacturing firms are related to contextual factors: level of competition, level of information technology quality, level of product diversity, level of overhead, perceived environmental uncertainty, business strategy, and firm size, and also to investigate whether for these firms, the infusion ABC related to this contextual factors and two addition factors: top management support and training in Iranian manufacturing firms.
2) To investigate whether the adoption and infusion ABC improve Iranian manufacturing firms' performance (financial and non financial) and also to investigate whether these firms that are in higher implementation stages of ABC have greater levels of performance (financial and non financial) than firms in lower ABC implementation stages.
1.3.2. Specific research objectives
1) To investigate whether ABC implementation stages for Iranian manufacturing firms are related to contextual factors: level of competition, level of information technology quality, level of product diversity, level of overhead, perceived environmental uncertainty, business strategy, and firm size.
2) To investigate whether the degree of importance for each above contextual factors are qualifying by ABC implementation stages.
3) To investigate the different degree of Iranian manufacturing firms performance (financial and non financial) in each ABC implementation stages.
4) To investigate whether ABC adoption for Iranian manufacturing firms is related to contextual factors: level of competition, level of information technology quality, level of product diversity, level of overhead, perceived environmental uncertainty, business strategy and firm size.
5) To investigate differences in level of organizational performance (financial and non financial) between ABC adopters Iranian manufacturing firms and non-adopters firms.
6) To investigate whether for Iranian manufacturing firms those have adopted ABC, infusion ABC is effected by contextual factors: level of competition, level of information technology quality, level of product diversity, level of overhead, perceived environmental uncertainty, business strategy, firm size, top management support, and training.
7) For Iranian manufacturing firms that have adopted ABC, to investigate differences in level of organizational performance (financial and non financial) between ABC infusers and non infusers firms. Table 1.1 shows the relationship between research questions and objectives
This study attempts to have both academicals and theoretical contributions. At the level of theory, the primary relevance lies in its examination in three distinct perspectives: implementation stages, adoption, and infusion of ABC
1.4.1. Contributions to academic
The current study attempts to contribute to the theoretical body of knowledge in fields of cost accounting, performance measurement systems, strategic management, as well as management accounting innovation systems with theoretical implications. The finding may explain some aspects of organizational change theory by addressing evidences in three distinct perspectives: implementation stages, adoption, and infusion of ABC. There are expected some contributions to academic research in implementation stages, adoption, and infusion of activity-based costing (ABC). The first contribution is on improving a conceptual framework covering the issues of perceived environmental uncertainty (PEU). The study will contribute to academic research with its conceptualization of PEU and investigate influences of PEU on implementation stages, adoption, and infusion of activity-based costing (ABC) as a most important determinant for reaching to adoption and infusion of ABC. The potential for management accounting literature (MAS) to inform ABC implementation research is highlighted by this study. Furthermore, the study contributes to the strategic management literature with providing evidences concerning the identification and measurement of Miles and Snow's strategy typology. Next, this study contributes to the literature regarding using multidimensional performance measures and testing relationship between ABC adoption, infusion, and implementation stages and firms financial and non financial performance.
Finally, this study contributes to the literature concerning investigate combination effect of certain contextual factors: level of competition, level of information technology quality, level of product diversity, level of overhead, perceived environmental uncertainty, business strategy, and firm on ABC adoption, infusion, and implementation stages.
1.4.2. Contributions to practices
This study attempts to contribute to ABC system designs and usage, business strategy usage, and organizational performance condition. Regarding the ABC system designs, focus on factors that influence ABC adoption and infusion will provide useful results for Iranian firms who are interested for applying ABC. Based on the finding of this study, organizations in high rate of positive characteristics are the good candidates for applying ABC. The finding may cause these companies become involved in ABC system for improving their cost accounting systems. Moreover, Iranian firms who are interested for applying ABC may get guidelines by controling the factors which ABC adoption is related to them.
In the respect of business strategy usage, this study tries to find evidences for role of business strategy in the design, and use ABC system. This study investigates the degree to which firms emphasize each of the business strategy types proposed by Miles and Snow (1978 ) and investigate the relationship of their strategy with implementation stages, adoption, and infusion of ABC. Organizations with specific business strategy may show as the good candidates for applying ABC. Thus the result may cause these companies involve to ABC as beneficial tool for increasing the value of their cost accounting methods.
Furthermore, this study attempts to find the role of adopting and infusing ABC system in improving both financial and non financial organizational performance. The result of this study identified clear picture of organizational performance with and without using ABC, thus the firms may motivate to applying ABC to understand using this system may improve their organizational performance.
1.5. Scope of study
The research scope emphasizes manufacturing firms in Iran. Initial phases of the study focus on cost accounting systems and especially on activity-based costing as a new cost accounting system. Manufacturing firms are chosen because they generally use a cost accounting system, traditional or a new model. Moreover, from various industries manufacturing have to use cost accounting system for financial reporting. This study focused of factors that may influence implementing ABC as a one of the most important cost accounting innovation. It seems manufacturing firms are corresponding for testing level of diversity and level of competition that this study attempt.
Some research studies concentrate on both manufacturing and services sectors. In this study the overhead cost assumes as an independent variable and these firms should place a greater concern for overhead cost. Beside, manufacturing sectors in Iran is growing and plays a dominant role in the Iran economy by being one of the largest sectors. Since the study also attempt to find the influence of perceived environmental uncertainty (PEU) on the extent to which a firm uses ABC systems, manufacturing industry is appropriate because in this firms, PEU in many ways arise such as unpredictability in supply their row material and components.
Definition of Research Variables
Fourteen variables are used in this study. Table 1.2 presents the relationship between these variables to research objectives, research hypotheses and also their relate questions in the questionnaire.
These fourteen variables are defined based on other researcher definitions that instrument for measuring the variables is barrowed from them. Definitions of these variables are as follow:
1.6.1. Level of information technology quality
According to Krumwiede (1998b) level of information technology quality is defined as the level of quality of exiting information technology system in the company. The measurement dimensions for IT quality include the accessibility of information, user friendliness of the information system, availability of detailed information in the variety of cost data, and timeliness of the information provided by the system.
1.6.2. Level of product diversity
Level of product diversity is defined according to Khalid (2005). He defined level of product diversity as the variety of volume of products. Level of product diversity was measured based on number of products that produce in the manufacturing firms.
1.6.3. Level of overhead
Chen (1996) explained that overhead costs are normally caused by documentation, depreciation, engineering maintenance, rework, inspection and repair. Level of overhead used was defined on Krumwiede (1998b). She defined degree of overhead as a proration in cost of products. The measurement was involved with the calculation of firm's cost structure and measured components of cost included direct material cost, direct labor cost, and overhead cost. Then percentage of overhead applied as a level of overhead cost.
1.6.4 Perceived environmental uncertainty
This sturdy defined perceived environmental uncertainty according to Jusoh (2008). She focused on respondents' perceptions on the predictability of seven aspects. She measured mean of these aspects and served as the overall perceived environmental uncertainty score for a firm. These directions included firm's suppliers, competitors, customers, financial/capital markets, government regulatory, labour unions, and economics politics/technology.
1.6.5. Level of competition
Level of competitive related to the status of competition that a firm faces in a particular industry. Ramaswamy (2001) defined the level of competition as the number of firms in a particular sector and the market share of each competitor. In this study based on Cohen et al., (2005), a single item indicator was used for measurement of level of competition. Level of competition was assessed using number of competitors in the same industry.
1.6.6. Business strategy
This study examined the degree to which firms emphasize each of the business strategy types proposed by Miles and Snow (1978 ): prospector, analyzer, defender, and reactor. The fundamental difference among these types is the rate of change in the organizational domain. Miles and Snow (1978 ) defined these types of business strategy as a follow: "Prospectors are characterized by their dynamism in seeking market opportunities. They are usually innovators that create change in their respective industries. In contrast, defenders have a strategy which is the polar opposite from prospectors. They operate within a narrow product-market domain characterized by high production volume and low product diversity. Analyzers stand between these two strategy types: prospectors and defenders and attributes of both strategy. Finally, the companies that are reactors do not follow a conscious strategy. Business strategy is measured regarding Jusoh and Parnell (2008). Business strategy is operated by taking the mean score across the twelve items categorized in four strategic types. Then for each firm the degree of the mean value which classified into four strategic types was compare. The highest value indicated which the firm emphasizes a given strategy. This instrument measured four strategic types as proposed by Miles and Snow (1978 ).
1.6.7. Firm size
According to Krumwiede (1998b) the firm size defined and consider as a independent variable. She defined size of company based on annual amount of sale revenue.
1.6.8. Top management support
Top management support is defined according to Maelah and Nasir Ibrahim (2007). They defined top management support as a level of top management support for adopting and implementing ABC system. In current study, top of management support was related only to ABC adopters, and this variable was considered in ABC infusion analysis. Top management support measured based on the degree of agreement about six statements regarding top of management support in the company.
Training is defined as a level of ABC training provided in the stages of ABC implementation (Krumwiede, 1998b). Training reflects the level of training involved in the design, implement, and use of ABC. The definition regarding level of training is adopted from Krumwiede (1998b). Level of training was related to ABC adopters firms only, and this variable was considered in Infusion analysis. The measurement included three phases and these three training phases are regarding level of training provided in the company in the design, implement, and use of ABC.
1.6.10 Activity-based costing (ABC) adoption
Bjørnenak (1997) asserted definition of adoption is very important and different definitions determined the different number of adopters in a study. This study defines 'the adoption of ABC' according to Krumwiede & Suessmair (2005). They defined adopter firms as firms that have implemented ABC, are currently implementing it or plan to do so. In the model assume complete implementing ABC is happened in seven stages. Hence, this study the adoption rate includes a number of firms that meet last four stages. The adoption variable is ZERO for firms in stages 1 through 3 and ONE for firms in stages 4 through 7.
1.7.11 Activity-based costing (ABC) infusion
Based on Krumwiede & Suessmair (2005) the infusion of ABC defined as the stage when ABC information is used outside the accounting department for decision making. For measuring "infusion of ABC" only ABC adopters firms are included in the sample (firms at stage 4 or above). From four adoption stages, firms were labeled as the infusers if meet stage seven. The Infusion variable is ZERO for firms in stages 4 through 6 and ONE for firms in stages 7.
1.6.12 Activity-based costing (ABC) implementation stages
This study defines 'the implementation stages of ABC' according to Krumwiede & Suessmair (2005) model. Based on this model, implementation of ABC is completed in seven stages. Krumwiede & Suessmair (2005) believed that the stage distinctions are not as clear-cut as suggested by any other implementation model.
1.6.13. Financial performance
Moll (2005) defined financial performance as the value of a firm's performance in financial aspect. This study applies multidimensional performance measures for measuring it. Financial performance defines as a degree of six indicator including: return on investment (ROI), sales volume, cash flow, market share, cost and cost reducing.
1.6.14. Non financial performance
This study defined non financial performance as the value of a firm's performance in non financial aspect. This study applies multidimensional performance measures for measuring it. Non financial performance defines as a degree of ten indicator including: on time delivery, customer and competitor monitoring, new product/service introduction, time to process activities, customer and employee satisfaction, productivity of labour, profile with the community, and quality of products.
Regarding the measurement of both level financial and non financial performance, the value for the performance importance and the value for the performance achievement are measured. Then a weighted average financial and non financial performance index was obtained for each firm. This allows for the creation of a performance index that may recognize the differing organizational performance of companies.
1.7 Overview of the dissertation
The following dissertation is structured in to six chapters as follows:
Chapter one: Introduction
Chapter one presents an overview of the research. In this chapter the background of the study is described and detail of research problem, objective and research questions are presented. It also describes scope of study and expected contributions. Moreover definitions of research variables for this study are presented.
Chapter two: Literature review
Chapter two is started with a brief description of existing literature relating to ABC and other cost accounting innovation systems. In this chapter, research on ABC categorize into three main categories including: theoretical studies, case studies, statistical studies and relevant literature present in this three categories. Cost accounting system literature is presented and links between ABC as an innovation system and activity-based management (ABM), activity-based budgeting (ABB) are reviewed. Moreover the ABC research on contextual factors that expected relevant to implementation of ABC (research variables for this study) is presented.
Chapter three: Theoretical framework and hypotheses development
Chapter three begins with a brief description of organizational adoption of innovation or innovation diffusion theory which is followed by this study. This chapter also provides the theoretical framework of the study, which is on the effect of certain contextual factors on ABC adoption, infusion, and implementation stages. Moreover, hypotheses development and a review of literature supports and justifications for each hypothesis are presented.
Chapter four: Methodology
Chapter four details the research design, including the Per-test questionnaire, process of sampling selection and survey construction. This chapter also explores the questionnaire design including maximize the survey response rates methods and translation of the questionnaire. Furthermore, variable measurement, data analysis techniques of this study and the models for testing hypothesis are outlined.
Chapter Five: Result
Chapter five explores the results of the research undertaken. In this chapter, results from the data analyses are presented and hypotheses were tested using logit test, independent sample t-test and ANOVA. This chapter describes the response rate, non-response bias, validity, reliability, and descriptive analysis. This chapter also provides the report results of testing the relationships between contextual variables and implementation stages, adoption, and infusion ABC, as well as the relationship between the latter with organizational performance. In addition, in the last part hypotheses are tested in the models.
Chapter six: Discussion and conclusion
A discussion of the results is provided in chapter six, as well as a discussion to which finding reported in the chapter five are able to provide answers to the research questions and success the research objectives set out at the beginning of the research. The finding of this study discuss in three major contextual factors: environmental factors, technological factors, and organizational factors that related to three distinct perspectives: implementation stages, adoption, and infusion of ABC. This chapter also provides a discussion on relationship between implementation stages, adoption, infusion of ABC and organizational performance. Moreover, the both theoretical and practical implications and the study's potential limitation are presented. For overcoming such limitations, several suggestions for future research are presented and finally the overall finding of this study is highlighted.