Original Research

Factors affecting the adoption of activity-based costing in a South African state university

Annah Kudanga, Zwelihle W. Nzuza, Lesley J. Stainbank
Journal of Economic and Financial Sciences | Vol 16, No 1 | a837 | DOI: https://doi.org/10.4102/jef.v16i1.837 | © 2023 Annah Kudanga, Zwelihle W. Nzuza, Lesley J. Stainbank | This work is licensed under CC Attribution 4.0
Submitted: 20 September 2022 | Published: 20 December 2023

About the author(s)

Annah Kudanga, Department of Management Accounting, Faculty of Accounting and Informatics, Durban University of Technology, Durban, South Africa
Zwelihle W. Nzuza, Department of Management Accounting, Faculty of Accounting and Informatics, Durban University of Technology, Durban, South Africa
Lesley J. Stainbank, Department of Financial Accounting, Faculty of Accounting and Informatics, Durban University of Technology, Durban, South Africa

Abstract

Orientation: There is a lack of empirical studies regarding the adoption and implementation of the activity-based costing (ABC) system in South African state universities, despite its advantages.

Research purpose: This study reports the perceptions on the factors influencing the adoption of ABC held by finance and academic staff at the Durban University of Technology (DUT), KwaZulu-Natal.

Motivation for the study: The lack of empirical studies demanded understanding of those factors that influence the adoption of ABC at state-owned universities in South Africa. Therefore, this study examined the factors influencing the adoption of ABC in a South African state university using the DUT as a case study.

Research approach/design and method: The study adopted a mixed research method conducted with 202 staff members: 129 academics, 41 heads of departments and 32 finance staff.

Main findings: The positive factors influencing the adoption of ABC included the organisational strategy, information technology, decision usefulness of cost information, contextual orenvironmental factors and the organisational structure. However, the systems adaptability theme was considered a barrier to the adoption of ABC.

Practical/managerial implications: The information could inform strategic initiatives related to the adoption and implementation of ABC in the university or similar state-funded universities.

Contribution/value-add: The study provided an empirical understanding of the factors that would hinder and assist the adoption and execution of the ABC system.


Keywords

activity-based costing; implementation barriers; implementation facilitators; public universities; overhead costing system

JEL Codes

B17: International Trade and Finance; B22: Macroeconomics; B26: Financial Economics

Sustainable Development Goal

Goal 4: Quality education

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