Activity Based Costing,It`s implementation and impact on organisational performance

Implementation of Activity Based Accounting and Organizational Performance

Abstract

The study consisted of five chapters : an introduction , literature review , methodology , discussion , and a summary and conclusion . The study focused on Activity Based Costing or ABC as tool used to expense operating costs focusing on a case study of Global Home Loans , United Kingdom . This meant defining ABC and examining its history and future as an accounting tool . The purpose of the study was to do an in depth look at ABC implementation with relation to organizational performance This led to

examining factors found within corporate culture that challenge implementation . It also found that with proper management of communication , values toward being a learning organization and leadership in place , implementation of ABC and its software , as a framework can create higher levels of performance and a more cohesive organization . A methodology of case study focusing on Global Home Loans in the United Kingdom acted a framework for understanding ABC implementation and organizational performance levels . Managers use models like SWOT and Porter 's Five Forces to analyze the usefulness of tools like ABC . These tools allowed issues of performance to be addressed and results in a better implementation strategy . Still the vary nature of implementation means change and with change results implications that need to be discussed . While the implications of increased productivity , innovation , creativity and increased knowledge in the work place can be seen as positives , the negatives of such implementation must be addressed

Introduction

In today 's global marketplace , it is necessary to introduce the concepts of e-business for an organization to survive by improving communication and learning . This means using Activity-Based Cost systems or Activity Based Costing software (ABC ) throughout the organization for easier accounting of operating costs and work processes . By adopting such systems , it is hoped that communication and work processes will be seamless . The fact remains computers are not far from an individual 's desk , these machines are available to make-work easier , to incorporate new and accurate information into the day to day operational processes of an organisation . This work will examine the general view of ABC and its relationship to organizational performance . Because of investigation into this relationship , it was also important to explore issues of organizational behaviour and how they relate to implementation of tools like ABC . Does this present limitation for the performance of ABC

An effective ABC system should not only be a tool used to account for expenses but also should aim at making different organizational tasks easier . In this respect , it is important for an organization understand how an ABC system works and how it will function within its reality to make the art of communication and work processes seamless . By understanding the outcomes of a specific case study and related examples found in literature , one can reflect on the future of ABC systems within the organizational culture . It is important to look to future applications to understand how technology influences present processes . The key concept of ABC is to...