1. Top Management Support

Top management support is widely recognised as one of the most crucial determinants of ABC success. Effective implementation requires commitment from senior leadership, not only in terms of funding and resources but also in creating a supportive environment that encourages the acceptance and use of the ABC system. According to Hughes & Pierce (2019), top management's involvement in planning and monitoring the progress of ABC is essential to overcome initial resistance and sustain the system in the long run.

Leadership must communicate the strategic importance of ABC to the entire organisation, aligning the goals of the system with broader corporate objectives. Drury (2020) highlights that organisations where top executives champion the ABC system are more likely to see it integrated into routine decision-making processes, such as budgeting, pricing strategies, and performance evaluation. Conversely, a lack of managerial commitment can lead to the failure of ABC initiatives, as noted by Cooper & Kaplan (2021), where implementations were abandoned because they were seen as too complex or unnecessary without sufficient managerial endorsement.

2. Organizational Culture

Organisational culture, which refers to the shared values, beliefs, and practices within a company, is a significant factor influencing ABC implementation. A culture that is adaptive to change, continuous improvement, and innovation will naturally facilitate the successful adoption of ABC. Kocakulah, Gupta, & Fowler (2019) argue that ABC is most effective in organisations that encourage open communication, where employees are willing to embrace new methodologies and share information across departments.

In contrast, organisations with rigid or hierarchical cultures tend to struggle with ABC implementation. Resistance to change is often cited as a major barrier, particularly in companies with long-standing traditional costing systems. Innes, Mitchell, & Sinclair (2020) observe that in such environments, employees may fear the transparency that ABC brings, as it could highlight inefficiencies or underperformance in certain departments. In extreme cases, the introduction of ABC may even be perceived as a threat to job security, leading to resistance that can undermine the system's effectiveness.

3. Technological Support and Infrastructure

ABC systems require the handling of vast amounts of data, which necessitates a robust technological infrastructure. Advances in Enterprise Resource Planning (ERP) systems, data analytics, and software automation have greatly enhanced the feasibility of ABC by simplifying the data collection and analysis process. Turney (2018) emphasises that modern ERP systems streamline the process of gathering activity-level data, processing cost pools, and assigning costs to products or services based on actual resource consumption.

For ABC to succeed, organisations need to invest in technology that integrates seamlessly with their existing accounting and operational systems. Chapman & Kihn (2020) argue that in the absence of suitable technology, manual data collection and analysis can lead to errors and inefficiencies, which may make ABC impractical in large or complex organisations. Furthermore, the ongoing advancements in cloud computing and artificial intelligence (AI) offer opportunities to enhance the accuracy and efficiency of ABC systems. These technologies enable real-time data collection and analysis, providing more accurate cost insights and enabling more dynamic decision-making processes.

4. Training and Education

The successful implementation of ABC also depends heavily on the knowledge and skills of the employees who will operate the system. Effective training programs are essential to ensure that staff at all levels understand the principles of ABC, the technology used to support it, and the ways in which ABC data can inform decision-making. Adams & Roberts (2019) stress that employees must grasp the strategic relevance of ABC and how it aligns with the company's goals.

Training is not a one-time effort; ongoing education is necessary to adapt to the continuous refinements in ABC systems. Employees need to stay up to date with evolving best practices and technological innovations that impact ABC. Drury (2020) emphasizes that organisations that prioritise continuous learning are more likely to realise the full potential of ABC. They ensure that employees remain proficient in using the system to identify cost drivers, assess performance, and support strategic decision-making.

Moreover, Turney (2018) highlights the importance of including cross-departmental training, ensuring that employees from different functions (e.g., finance, production, and marketing) understand how ABC impacts their roles. This interdisciplinary approach facilitates collaboration and prevents the ABC system from being siloed within the accounting department.

5. Accurate Data Collection

Accurate and reliable data is the foundation of any ABC system. The quality of the information gathered about activities, resource consumption, and cost drivers directly influences the accuracy of the cost allocations. Innes et al. (2020) argue that without precise and detailed data, the advantages of ABC can quickly be undermined, leading to misinformed decisions. Accurate data ensures that overhead costs are traced to the correct activities and cost objects, providing a clearer picture of product profitability and resource efficiency.

To support accurate data collection, organisations must design efficient data tracking mechanisms. Turney (2018) suggests that this can be achieved through technological investments in automation, which reduce human error and ensure consistent data flow. Frequent data audits are also critical to identify discrepancies and maintain the integrity of the ABC system. These audits should verify that the cost drivers selected during the design phase remain relevant over time, as shifts in business operations or market conditions may require adjustments to the costing methodology.

6. Organizational Structure

The structure of an organisation can influence how effectively ABC is implemented and sustained. Decentralised organisations, where decision-making is spread across various levels, tend to benefit more from ABC as the cost drivers and activities are more visible across different departments. Chapman & Kihn (2020) argue that in decentralised firms, ABC data can empower managers at different levels to take ownership of cost management, thereby improving accountability.

On the other hand, highly centralised organisations, where decision-making authority is concentrated at the top, may find it more challenging to implement ABC. In these organisations, the flow of information is often limited, making it difficult to capture the necessary data from various departments. Cooper & Kaplan (2021) emphasise that centralised firms may face bottlenecks in data collection and decision-making, which can delay the successful implementation of ABC.

Moreover, Hughes & Pierce (2019) suggest that for organisations with complex hierarchical structures, restructuring may be necessary to facilitate ABC. This restructuring could involve improving communication channels, empowering middle managers with greater decision-making authority, and encouraging cross-functional collaboration.

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