Expectancy Theory as the Basis for Activity-Based Costing Systems Implementation by Managers

Abstract

Many studies, motivated by concerns for activity-based costing (ABC) implementation efforts being less than successful, have suggested that the lack of success in this area stems more from behavioral, as opposed to technical, factors. This concern for the behavioral aspects of systems implementation has also emerged from much of the more general information systems research examining determinants of implementation success. Accordingly, the purpose of this study is to determine if a popular process theory of motivation, expectancy theory, would be useful in explaining the motivation of managers to incorporate ABC information into their job. Data obtained from two experiments employing a judgment modeling methodology support the relevance of both the valence and force models of expectancy theory in this context. Further, the judgments provided by the subject managers suggest they perceive improved product cost accuracy as the most beneficial outcome of ABC use, followed by an equivalent appreciation for both an enhanced ability to communicate the underlying economics of the firm and to identify non-value-added activities. Additionally, subject managers exhibited a greater concern for the possibility that obtaining the data to maintain the ABC system would be difficult and costly than they did for concerns that the ABC information would increase the level of complexity of the information that they use.

Citation

Snead, K.C., Johnson, W.A. and Ndede-Amadi, A.A. (2005), "Expectancy Theory as the Basis for Activity-Based Costing Systems Implementation by Managers", Epstein, M.J. and Lee, J.Y. (Ed.) Advances in Management Accounting (Advances in Management Accounting, Vol. 14), Emerald Group Publishing Limited, Leeds, pp. 253-275. https://doi.org/10.1016/S1474-7871(05)14012-X