Relevance lost: The rise and fall of activity-based costing

Nitza Geri, Boaz Ronen

פרסום מחקרי: פרסום בכתב עתמאמרביקורת עמיתים


In the debate between marginal decision-making and full absorbance that has been going on since the nineteenth century, activity-based costing/management (ABC/M) appeared as a promising decision support tool which answers the criticism leveled against traditional cost accounting. This paper describes the strengths and weaknesses of ABC/M from a global value creation perspective, in an effort to explain why it failed to live up to its promise and why not too many companies retained it beyond a short pilot period. The paper suggests the global decision-making methodology (GDM), as an effective alternative to costing methods, which improves the quality of decisions and enhances organization value. The paper illustrates its implementation by presenting a case study of a large international financial services organization that abandoned the ABC/M system it had been using for seven years in favor of GDM. The ABC/M system was transformed to a throughput focused "light ABC" system that supports GDM. The article describes the circumstances that led the organization to adopt GDM, and provides general guidelines for its implementation.

שפה מקוריתאנגלית
עמודים (מ-עד)133-144
מספר עמודים12
כתב עתHuman Systems Management
מספר גיליון2
סטטוס פרסוםפורסם - 2005

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