The Relationship between Activity Based Costing, Perceived Environmental Uncertainty and Global Performance

The aim of this paper is to present the main results of an empirical studydone in Morocco and attempts to highlight the impact of the perceivedenvironmental uncertainty on the activity based costing implementation and itsperformance according to the perceived environmental uncertainty. Data werecollected from 62 Moroccan firms, operating in different sectors, via aquestionnaire survey. Descriptive statistics, logistic regression and Student's ttestfor a difference in means were used to analyse data. The results showedthat 12.9% of the responding companies used ABC. The results using logisticregression indicate that the PEU influences significantly and positively the useof the ABC. Also, we found that the management accounting system based onABC method results in a better performance for enterprises that have adoptedit. Finally, we demonstrated that the firms operating in an uncertain anddynamic environment have an interest to adopt this new method of themanagement accounting, but the firms operating in a certain and stableenvironment are indifferent between adopting and not adopting this method.This research adds to the understanding of the factors explaining the adoptionof management accounting innovations such as ABC, basically in a newcontext like Morocco. The context of the study and the characteristics of theinnovation are important factors in explaining its adoption. These two factorsmust be taken into account when choosing a costing system. This type of workis almost absent in African countries. Previous research has studied perceivedenvironmental uncertainty in the context of innovations other than ABC. Theoutcomes of the study are relevant to the literature on both ABCimplementation and performance of ABC, since they determine that the use ofABC results in improving in firm’s performance.

The Relationship between Activity Based Costing, Perceived Environmental Uncertainty and Global Performance Keywords:

ABC adoption , Environmental uncertainty , Performance , Moroccan firms