Supply and demand for management accounting innovations : multidimensional analyses of the diffusion of activity-based costing and time-driven activity-based costing

Abstract

The purposes of this study are to examine ABC paradox via identifying the diffusion pattern of ABC and TDABC over time, and to compare the industries where ABC and TDABC are spreading well and those that are not, and to find out how and why the differences in diffusion occurs in these fields. For macro analysis, diffusion patterns of ABC/TDABC are analysed through a systematic literature survey between 1988 and 2019. And for micro analysis, comparison between the industries where ABC and TDABC are spreading well and those that are not are analysed. For this, Korean hospital industry and manufacturing industry are studied through case studies focused on the suppliers (academics and consultants), the demanders (practitioners), and the dynamics between the two. Findings of this study are two-fold. First, in macro analysis, ABC/TDABC diffusion is very active in non-business management fields, in particular to the bio/medical field. In addition, practitioner authors with practitioner content articles drive ABC/TDABC diffusion recently. Second, micro analysis reveals several reasons that TDABC spread is better in hospital industry than in manufacturing. Unlike manufacturing, the hospital industry has a distinct community of potential demanders, and TDABC suppliers pioneered the market with hospital-only TDABC package. In addition, unlike many manufacturing industries where ERP substitutes such as SAP exist, hospitals have no alternatives other than TDABC. This contributes to greater demand on TDABC as the sole provider of information. In addition, the manufacturing industry conducts performance evaluation at the department level. so practitioners are not very interested in TDABC, but in hospitals that perform individual performance evaluation on a per-doctor basis, and is evaluated on the basis of time, a fair standard, so practitioners are very interested in TDABC. This contributes another reason to the mass spread of TDABC in hospital. This study contributes to a comprehensive review of ABC/TDABC by providing holistic longitudinal view of the development patterns and underlying forces of ABC/TDABC. This study also contributes to the study of the spread of MAI by adding new research on the supply and demand sides of diffusion process of TDABC to the study on the diffusion of ABC.