Research Summary
Research Summary
The Impact of ABC on Managerial Decisions
Description
In this type of research, Ratna Sarkar seeks to determine whether, in fact, new cost systems such as ABC (Activity Based Costing) have a measurable effect on managerial decisions regarding product and customer mix.
The theory of ABC is now academically established, and its practice is widespread. But, there is only anecdotal evidence that ABC leads to ABM (Activity Based Management) i.e., that ABC implementations provide better information to managers and affect their decisions in a positive way. In particular, she investigates whether ABC information impacts the decision to continue or discontinue products, change product prices and customer mix, and the organizational and industry factors that limit or facilitate its implementation.