jurnal dengan bahasa inggris

Anderson, S. 1995. A framework for assessing cost management system changes: The case of activity based costing implementation at General Motors, 1986-1993. Journal of Management Accounting Research (7): 1-51.
Summary by Antoinette L. Lynch
Ph.D. Program in Accounting
University of South Florida, Spring 2002
Purpose: The purpose of this paper is to provide a structured account of experimentation with, and adoption and adaptation of ABC in General Motors Corporation, from 1986 to 1993. What are the factors likely to influence the success of ABC implementation?
Motivation: Companies are adopting activity based costing (ABC), and thus provides an opportunity to study the technical and organizational impact of management accounting system changes. Behavioral factors are critical to successful implementation of new cost management systems, and there has been little research on the implementation process.
ABC:
ABC assist in determining the true cost for a cost product, job, service, or customer
The process helps to distinguish moneymakers from money losers, compare different options, and find an economic break-even point.
ABC is a more accurate cost management methodology. It makes indirect expenses direct.
ABC systems promote decisions that are consistent with lean production, such as: reducing inventories; increasing common components; increasing quality by minimizing total quality costs; minimizing cost of ownership through supplier management, etc.
Background:
Researchers began to respond to evidence that well-designed ABC systems that revealed dramatically different product costs were not generating management behavior consistent with profit maximization. A new stream of research emerged that linked ABC to organizational change. Early discussion of ABC implementation assumed that data from ABC were universally superior to traditional cost data and that rational agents would prefer ABC data if it were available at reasonable cost. Implementation failures were attributed to poor ABC designs, inadequate management awareness of ABC system costs and benefits, and communication failures between designers and users. The concern of stakeholders needs to be addressed (i.e. embarrassing or threatening conditions for existing managers).
Sample: Single case study of ABC implementation at General Motors Corporation that spans an extended time (1986-1993) and includes multiple perspectives.
Ten corporate and division-level salaried employees were interviewed in over 40 hours of taped interviews. These are individuals with decision-making authority or responsibility for implementation. The interviews were conducted post-ABC implementation, therefore, it was hard to identify those who opposed ABC adoption.
Theory: The search for factors that influence ABC implementation success is guided by the information technology and organizational change literatures: Kwon and Zmud’s six stages of implementation (initiation, adoption, adaptation, acceptance, routinization, infusion) were used to define transition points in ABC implementation.
Method: This study employs exploratory case study research to develop a framework of cost management system change that is grounded by evidence from one firm’s experience implementing activity based costing. Data is gathered from interviews with management between March and August 1993, archival records (i.e. ABC training materials), and direct observation of a corporate ABC User’s Group meeting. The primary method of analysis is with-in case comparison of data sources.
Contribution:
The paper makes three contributions to the management accounting literature:
1) First, this study provides the first clinical account of ABC implementation that spans many years and includes the perspectives of managers from many functional areas and hierarchical levels.
2) Second, the research contributes a framework for assessing ABC implementation that is linked to mature, grounded theories of IT implementation and organizational change.
3) Finally, as part of theory development, the paper identifies behavioral and contextual factors that influence ABC implementation success.
Describing the emergence of ABC as a GM policy using Kwon and Zmud’s six implementation stages:
1-Initiation: During initiation, pressure to change arises from internal needs or external competitive threats and a search for solutions begins.
During the 1970s GM went from one to two cost centers to as many as 1200 in an attempt to accurately allocate production, versus distortions in product cost. However, capital and labor expenses caused managers to question whether this approach was an adequate solution.
In early 1987, five separate, uncoordinated costing experiments were underway: three originated in metal stamping plants and a fourth originated at GM Research (GMR) but was applied to metal stamping. One of the three plants that originated in metal stamping was in Pontiac, Michigan. The Pontiac plant, threatened with closure, experimented with an approach called “transactions costing” that was later renamed ABC. This experiment was unique in that they promoted ABC throughout the corporation (got other plant comptrollers to buy in on their new cost approaches).
There were still individuals asking, “What benefits are we actually going to get from this.” However, true adoption meant having “buy-in” from many individuals within the organization. It wasn’t until the formation, in October 1988, of the Cost Systems and Measurements Council (CSMC) that ABC designers had confidence that the company was going to look at ABC and only ABC.
2-Adoption: Encompasses the selection of a proposed solution and the decision to invest resources to facilitate change.
The cost team of CSMC workgroup was charged with assessing the feasibility of ABC as a corporate strategy. The CSMC team was given four guidelines for developing a corporate ABC proposal (see page 20). Also, the workgroup identified two prerequisites to ABC becoming a corporate strategy. First, they had to demonstrate that ABC was applicable to a variety of process settings, including vehicle assembly, machining, stamping, molding, specialty processing and component assembly. Second, they needed to link ABC to corporate strategies for improved performance and show that ABC data precipitated better decisions.
To address these concerns, the CSMC cost team linked several plants (a pilot sample of 19 plants that represented most GM production processes) and tested the systems usefulness.
Through this process issues were raised and addressed, and core cost drivers were identified as a useful starting point.
In May 1990, the cost team proposed an organizational structure for supporting ABC that was accepted by the Council (the Executive Committee and the CFO’s Staff Meeting). The cost team of CSMC workgroup was renamed the ABC Steering Committee and became the backbone of the new ABC Oversight Committee. Corporate implementation was to be adopted by 1993.
3-Adaptation: In the process of changing, unforeseen needs or system shortcomings are identified.
To implement ABC by 1993, an aggressive schedule was laid out to implement 41 plants in 1991, 38 in 1992, and 31 in 1993.
Three presentations motivated discussion on three crucial issues that shaped the Steering Committee’s agenda for several months. All concerns were addressed:
First, the managers were concerned that ABC was not being communicated as a corporate policy to plant management.
Second, in the absence of a strong endorsement of ABC, managers relied on traditional systems that were not easily reconciled to the ABC system.
Third, the committee commented, “ABC needs to be restructured as a pull system with top management requiring cost information to be derived from ABC data.”
While some groups reluctantly accepted ABC adoption, others rapidly adapted it to fit their information needs. Those who led the adaptation process shaped the ABC system that gradually became institutionalized through “communization” as the corporate standard.
4-Acceptance: Reflects the minimal level of use and maintenance that the new technology requires to be sustained.
The first indication of corporate acceptance and the intent to routinize ABC was publication of July 26, 1991 of the Comptroller’s Circular Letter entitled “Implementation and Utilization of Activity-based Costing.” It was well received by plants because it provided the first tangible evidence of corporate support and signaled plants to dedicate resources to ABC.
Acceptance, as defined by the minimal level of use necessary to support survival of the technology, was attained by the close of 1993, where this study concludes.
Kwon and Zmud model successful negotiation of each stage of IT implementation as a function of five broad factors:
The individuals involved – the early days of experimenting with new cost systems were populated by entrepreneurial individuals who championed the cause of ABC – Pontiac’s Comptroller was well-placed to drive change.
A bias for change must be accompanied by a measure of patience and willingness to persuade others of the merit of the change.
Individuals who were most likely to be enthusiastic ABC team members were those with significant process knowledge (engineers or first-line supervisors).
Individual’s attitude toward change remains critical to the adaptation process.
The organization’s structure: Several managers cited GM’s strong finance function and its historical independence from operations as the greatest source of resistance to ABC at both the plant and corporate levels. By virtue of their independence, participants in each experiment developed loyalties to their approach. Because the Cooney Report was conducted by specialists in the accounting and finance area, it is difficult to separate the role of centralization from that of specialization in the failure of the study to produce revolutionary alternatives.
Centralization and functional specialization are often accompanied by vertical communication flows. However, informal horizontal communications networks-those that linked plants with similar processes or plants in the production sequence-were critical in introducing ABC as a viable corporate strategy.
Technology and ABC Implementation: Technology factors-complexity of use, compatibility with existing accounting systems and the relative improvement over the existing cost system-were from the beginning critical elements in the search for new cost system approaches.
Complexity, compatibility, and relative merit compared to traditional cost systems were also key criteria. (ABC over other cost system proposals and over the traditional cost system)
Managers cited the intuitive appeal of an ABC design process that solicited specific process knowledge from people in the plant as the strongest argument for the approach.

ABC Task and Implementation:
The level of task uncertainty was significantly lower for plant-level designers asked to build a cost system for a specific, familiar production environment than for corporate staff members who were asked to design a generic cost system that would apply to diverse production settings. This suggests a range in which task uncertainty is associated with attainable but challenging tasks that has a positive influence in initiation.
Evidence suggests that task uncertainty and worker autonomy reduce the probability of adoption.
The External Environment and ABC Implementation: It was no coincidence that cost system innovations were found primarily in GM’s metal stamping plants, where there was acute pressure to outsource parts (non-modernized plants) and to make radical changes in cost structure (modernized plants). Thus competition played a role in bringing cost systems under management scrutiny and promoted the search for new cost management approaches.
Another environmental factor that influenced ABC implementation was the role of external experts within the company. Having identified problems with the cost system, the choice of ABC was profoundly influenced by opinions of experts. Experts validated GM’s choice of ABC.
5-Routinization: Signaled by the complete replacement of old work practices by the new system. The IT applicable becomes a part of normal activities.
6-Infusion: Arises when the IT application is used, often in unanticipated ways, to improve effectiveness and is seamlessly integrated with other organizational systems.
Although 1993 marked the end of ABC implementation from the standpoint of developing ABC models for GM part manufacturing plants, ABC is far from a routine. Some of the earliest implementation sites have routinized ABC system maintenance and some uses of ABC data; however, only two plants were identified by corporate ABC managers as having reached “infusion” of the ABC approach.