THE RECEPTIVENESS PUZZLE: UNDERSTANDING WHY SMALL FAMILY BUSINESSES STRUGGLE WITH ACTIVITY-BASED COSTING ADOPTION
DOI:
https://doi.org/10.33736/ijbs.6914.2024Keywords:
Activity-based costing (ABC), Small family business, Case Study, Less-developed country, ChallengesAbstract
This study examines the challenges associated with the adoption of activity-based costing (ABC) in a small family business in a less developed country. Through a case study of PT XYZ, a logistic company, the study found that technical factors, including unpredictable customer requests, varying duration of activities, and uncertainty around distance and fuel consumption for each truck, make adopting the ABC method challenging. Organizational factors, such as a top-down hierarchy and the negative perception of the owner affecting the rest of the hierarchy, also contribute to the non-acceptance of ABC. Additionally, key agents within the company did not demonstrate enthusiasm toward changes. The cultural and contextual factors and unique characteristics of small family businesses further make them less receptive to adopting new ideas or changes, including the ABC method. This study offers practical implications for introducing changes, such as improving data collection processes, establishing better communication channels with family business owners, and seeking external expertise or advice from professionals with experience in family business management. The study expands the current discussion on ABC implementation and contributes to the family business literature by linking family business characteristics with the adoption of the ABC method.
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