An empirical study of the factors of the activity-based costing (ABC) implementation in Thailand : four case studies in Thai state enterprises (TSEs)

During the past two decades the activity-based costing (ABC) system has received a great deal of attention as a cost management innovation that may provide more accurate product costs than conventional cost allocation methods (Johnson 1987, Kaplan 1988, Cooper 1988a). Moreover, Favere-Marchesi (2001) stated that the ABC system is one of many such tools that have the potential to help Thai companies regain their competitive edge in an ever- growing world of contenders. The purpose of this study is to evaluate the implementation process of ABC systems in Thai organisations, particularly Thai State Enterprises (TSEs), in order to identify the factors influencing this implementation so as to make suggestions for its improvement. As part of this a theoretical framework for ABC implementation in Thai State Enterprises is developed. This study has two objectives: the first is to obtain a picture of cost accounting systems, both traditional costing systems and ABC systems in Thai organisations, as the preliminary of this study. The second objective is to trace the ABC implementation in selected Thai State Enterprises where ABC systems have been implemented. This will examine the development of the ABC implementation in four Thai State Enterprises, namely, Thai Plywood Company Limited (TPC), Metropolitan Electricity Authority (MEA), Electricity Generating Authority of Thailand (EGAT) and TOT Corporation (Public) Company Limited (TOT). The results from this study, after in-depth investigation, reveal a large number of sub-factors influencing implementations; however, these sub-factors were compiled as nine main factors including, (1) Top management support, (2) Computer systems, (3) Education and training, (4) ABC team, (5) Objectives of ABC implementation, (6) ABC implementation process, (7) Benefits of ABC implementation, (8) Problems with ABC implementation, and (9) Level of progress of ABC implementation. Finally, this study develops a theoretical framework for ABC implementation and is the first to empirically apply an implementation stage model to Thai State Enterprises