DISCUSSION OF THE STUDY FINDINGS

4.3 Is ZIMSTATS using Activity Based Costing?

From the research conducted through questionnaires, 50% of the respondents strongly agreed
and 40% agreed that ZIMSTATS is using Activity Based Costing in allocation of overheard
except for 10% who were uncertain. This shows that the majority of the participants (90%) were
in support of the question asked and hence the shows that ZIMSTATS uses Activity Based
Costing systems in financial management. This was supported by Chea (2011), who asserted that
this is the Activity based costing is the best costing system to apply in services industries.

4.4 Role of Activity Based Costing in Financial Management.

The second objective of the study made an analysis on the role of the Activity Based
Costing of financial performance. The following were the variables under discussion;
The first variable was the role of ABC in effective allocation of resources. From the study
findings, it appears that the use of Activity-Based Costing (ABC) has contributed to the effective
allocation of business resources, with 80% of respondents indicating that ABC has played a role
in this. This finding is consistent with previous research conducted by Hoozée and Hansen
(2018), which also suggested that the primary role of ABC is to enable effective allocation of
resources. One reason for this may be that ABC provides a more detailed view of activities and
costs than traditional costing methods, which can help managers make more informed decisions
about where to allocate resources. By identifying the costs associated with each activity, ABC
can provide a clearer picture of how resources are being used and where improvements can be
made. Additionally, ABC can provide a new perspective on the allocation of overhead costs,
which can often be difficult to allocate accurately using traditional methods. This can lead to
more accurate cost information and better decision-making about resource allocation. Overall, it
seems that ABC can play an important role in enabling effective resource allocation in
businesses, by providing detailed information about costs and activities and offering new
perspectives on the allocation of overhead costs.
The second variable was the role of Activity Based costing in facilitating decision making. An
aggregate of 90% of respondent revealed that ABC played its role in facilitating decision amking
of the organisation. This was supported in the study by Krumwiede and Roth (2016), which
found that ABC was effective in helping managers evaluate the profitability of different products
and services, and in identifying opportunities for cost savings and process improvement. By
understanding the costs associated with each activity, managers can better evaluate the
profitability of different products or services, for example. They can also identify areas where
costs can be reduced or eliminated, which can lead to more efficient operations and improved
profitability. In addition, ABC can help managers make decisions about pricing, by providing a
clearer picture of the costs associated with different products or services. This can help ensure
that prices are set at a level that covers costs and generates a profit.
The third variable was the role of Activity Based Costing in cost reduction. From the study an
aggregate of 83.33% of respondents proved that ABC has contributed into the reductions of
organisational expenditure. These findings are also found in the study conducted by Hoozée and
Hansen (2018) which found that ABC was effective in identifying opportunities for cost savings
and process improvement in company, thus the study concluded that ABC could be a valuable
tool for reducing costs and improving profitability in manufacturing environments. By analyzing
the costs associated with each activity, ABC can help businesses identify activities that are
consuming a disproportionate amount of resources. This information can be used to identify
opportunities for cost savings, either by eliminating unnecessary activities or by finding ways to
streamline processes. For example, ABC may reveal that a particular department is consuming a
significant amount of resources, but generating relatively little value for the organization. Based
on this information, managers may decide to reorganize or eliminate the department, freeing up
resources that can be allocated to more productive areas of the business.
4.5 Factors that lead to successful use of Activity Based Costing
The second objective of the study determined the factors for the successful us of the ABC at
ZIMSTATS. The following were the factors under discussion;
The study revealed management support was a key factor in the success use of the ABC related
program at ZIMSTATS. Majority of the employees 83.34% propounded that the use of ABC
program at the company was highly influenced by the support they received from the
management. This findingS is consistent with previous research conducted by Ahmad et al.
(2017), which suggested that management support is a key factor in the successful adoption and
implementation of ABC systems. Management support can take many forms, including
providing resources for training and implementation, communicating the benefits of the ABC
system to employees, and actively promoting the use of the system within the organization.
Without strong support from management, employees may be less likely to embrace the new
system and may revert to using traditional costing methods.
The study also found that employee training is a critical factor in successful implemantation and
adoption of Activity Based Costing at ZIMSTATS. The study found that a total of 27 out of 30
respondents supported the view that employee training is a crucial factor in successful
implemantation of Activity Based Costing at ZIMSTATS. This study findings were supported by
a study conducted by Al-Matari et al. (2019) found that employee training was a key factor in the
successful implementation of ABC systems in the healthcare industry. The study emphasized the
importance of providing ongoing training and support to ensure that employees have the
necessary skills and knowledge to use the system. ABC systems can be complex and require a
significant amount of data input, so it's important for employees to receive proper training to
avoid errors and inaccuracies in cost reporting. Training can also help employees understand the
benefits of the system and how it can help improve decision-making within the organization and
doing so, management can help build employee buy-in and increase the likelihood of successful
implementation.
ZIMSTATS organization culture was believed to be an influencing factor towards the success of
ABC program. The study presented 70% of employees made support of the company
organization culture as the factor for the success for the ABC system. This is similar to the study
by Jusoh and Ahmad (2016) which found that organizational culture was a key determinant of
the successful adoption and use of ABC systems in Malaysian manufacturing companies. The
study emphasized the importance of a culture that values innovation, learning, and continuous
improvement in the successful implementation of ABC. However, the finding that 70% of
employees at ZIMSTATS made support of the company organization culture as the factor for the
success of the ABC system is certainly encouraging and suggests that the organization is creating
a supportive environment for the implementation and use of the new system
Besides top management support, employee training and organisational culture, competition was
also believed to be an influencing factor towards the success of ABC program but to limited
extent. The results show that competition towards the application of the ABC system is contrary
to what was expected. As shown in Fig 4.11 of the study 30% of the respondences supported the
view that competition can lead to successful use of Activity Based Costing. The majority of the
participants which constitute 46.67% disagreed with the notion and this suggests that other
factors maybe more important in successful implementantion of Activity Based Costing.
However, it's worth noting that a significant proportion (23.33%) of respondents were uncertain
about the role of competition in implementation of ABC, which suggests that this is an area that
requires further investigation.
4.5 Techniques that can be used to improve Activity Based Costing.
The third objective of the study aimed at establishing techniques or ways were used
byZIMSTATS to improve the performance of ABC approach. The following were the variables
under discussion;
The first technique raised was training on ABC, where all of the 30 respondents stressed that
training of employees on ABC related issues was the best technique that can be adopted to
improve ABC. This is consistent to the study conducted by Tran and Thao (2020) who revealed
the use of ABC improvement goes with provision of ABC related training to employees.
Employees lack of basic knowledge about ABC systems such as technical or resource obstacles,
definition of cost centres and cost drivers, lack of adequate information or technology system,
accumulation and integration of ABC data must be trained in order to conform to the system
The second technique used was an active top management support of the ABC related system.
With an aggregate of 56.67% of respondents revealing that availability of top management
support may improve Activity based costing, this means this is vital for the development and use
of ABC. This relates to the study by Beheshti (2014) found that a lack of management support
was a major factor limiting the improvement of ABC systems, particularly when general users
had a negative perception of the system. The study emphasized the importance of management
support in providing the necessary resources and support for users, communicating the benefits
of the system, and actively.
The third technique used was supporting employees. The study found that majority of the
participants, 66,66% came in support of the notion that supporting employee is a critical
technique in improving Activity Based Costing. The study outcome was supported by Hoozée
and Hansen (2018) who found that ongoing support and guidance were critical factors in
achieving successful implementation of ABC systems in a manufacturing company. This can be
achieved through emphasizing the importance of providing support to employees at all levels of
the organization, as well as ongoing support to ensure that the system is used effectively.
4.5 Barrier to succesful implementation of Activity Based Costing
The forth objective of the study aimed at examining the barriers to sucessful implementation of
Activity Based Costing at ZIMSTATS. The following were the variables under discussion
The first barrier which was cited was resistance to change. The study reveals that a total of 18
out of 30 participants (60%) purported that resistance to change is a major barrier to successful
implementation of Activity Based Costing at ZIMSTATS.This was consistent to a study by
Alipour, Mirtorabi, and Shoghli (2019) found that resistance to change was a significant barrier
to the successful implementation of ABC systems in manufacturing companies in Iran.
The second barrier which was cited was shortage of financial resources. The finding that 66.67%
of respondents in the study agreed that lack of financial backup is a major barrier to ABC
implementation at ZIMSTATS suggests that this is a valid concern and should be taken into
account when planning and implementing the system. This finding is consistent with previous
research by Walid ElGammal et al. (2016), who contended that ABC systems require significant
budgeting at financial and time levels. The study emphasized the importance of allocating
sufficient resources for the implementation and maintenance of ABC systems, as well as the
importance of involving top management in the budgeting process to ensure that the necessary
resources are made available.
The study also cited lack of knowledge as a major barrier to successful implementation of
Activity Based Costing. The outcomes shows that the majority of the participants (66.37%)
agreed to view that lack of knowledge about Activity Based Costing is a barrier to its successful
implementation and a considerable attention is needed on the knowledge of those charged with
implementation and utilisation of ABC at ZIMSTATS. A study by Quesado and Silva (2021)
supported the this view when the researcher suggested that lack of knowledge and expertise
about ABC can leads a failure in its implementation.
In a study in an electronics company in China to analyze the factors behind a
successful implementation of the ABC system, Liu and Pan (2007) reach a conclusion that
top management is in fact considered a very motivating key factor for the success of
applying the ABC system in this organization. Moalla (2007) tries to investigate the nature
of mechanisms influencing the application or rejection of the ABC system in Tunisia and
aims to detect and analyze the roles of different factors interfering in the adoption and
rejection of the ABC system. Regarding the factors behind not applying the ABC system,
Moalla (2007) concludes that beside the ignorance of the ABC system, the satisfaction from
the existing accounting system, the problems related to applying ABC, complexity of the
system, companies' other considerations and occupations, and the rejection and non-support
from top management, all have a significant effect on adopting the ABC system. Although
40% of the respondents in the study who did not adopt the ABC system state that their
current accounting system functions very well and that they are satisfied with it. Other
concerns or obstacles face the adoption of ABC system such as the resistance of change,
giving higher priority to resolve technical problems over analytical calculations problems,
and insufficiency of financial resources, and the high cost associated with the application of
this system (Moalla, 2007)

Because the ABC system requires that all activities involved in delivering the service along
with their cost drivers be recognized, managers may view it as a hard-to-apply system. But
at the same level, completing this task will assist companies in benchmarking operational
evaluations at both levels: activity and service. On the other hand, critics of the ABC system
highlight the point that ABC does not reflect the reliable impact of decisions taken on the
business operational level in the short-term. In fact, the ABC system is not intended for short
term decisions. These critics have missed the real purpose of the ABC system, which lies in
the strategic analysis of the operations (Turner, 2005).
Chea (2011) agrees with Cook, Grove, and Coburn (2000) that the aim of the ABC
system is to measure and then set a price for all the resources used for activities that are
consumed in the production of goods and services that are delivered to customers, given that
resources in this context include the ones needed for the direct activities generating the
services and for the support (indirect) activities. Many service firms as financial institutions
have link the expenses they incur to their offered products. Such comparison would
exemplify how the expenses of the production process emerge from the quantity and type
of goods sold. Before using the ABC analysis, every department must examine its own
combination of expenses and identify the forces that drive the demand in a specific
department. As a result, departmental demand is quantified according to its structure
(Hussain and Gunasekaran, 2001).

Theories Behind the Spread of ABC System

Malmi (1999), in his studies on the ABC system spread, relies on Abrahamson's (1991) four
theoretical perspectives. The first perspective is the efficient choice, which means that the
company will apply the ABC system based on a rationally economic logic. The second
perspective is the forced selection. It means that the company is obliged for a certain defined
reason to apply ABC such as top management orders. The third perspective is the mode effect:
the application of ABC system is related to its being an innovated system; it is well
reputable to apply it. The fourth perspective is imitation; the company would implement
ABC parallel to its rivals in the market. According to Chea (2011) the above perspectives
depend on two main points: whether the decision makers inside or outside the organizations
determine the adoption or refusal of the ABC system; and whether the process of imitation
determines or not the application of the ABC system.
- The choice effect: companies independently and rationally choose to apply the ABC
system driven by the efficiency objectives
- The forced selection: entities as governmental institutions exercise sufficient force to
determine the innovations and techniques that companies must adopt.
- The mode effect: companies choose deliberately to apply the ABC system when influenced
by organizations like consultancy, universities and mass media, referred to as: companies
fixing the mode.
- The imitation effect: studies regarding the diffusion of any new innovation have revealed
that the decision makers do not evaluate it based on scientific studies and their proven
consequences. However, they rely more on subjective criteria as the evaluation and feedback
provided by those who already applied it. As the imitation determines the adoption of the
ABC system, it is considered as one of the important factors for the ABC system execution.
Walley et al (1994) reports that the discomfort of top management to new systems and their
resistance to change, are among the most principal factors to the non-application of the ABC
system. Similarly, Argyris and Kaplan (1994) stated that regardless of the financial benefits
brought by the ABC system, managers frequently resist the change which applies not only
to the ABC system but also to any innovated system. Even if the ABC system is accepted
as an innovated system, communicating its application and results throughout the whole
organization remains a critical factor for the adoption or rejection of the ABC system
(Moalla, 2007). However, the communication process has to include four elements Moalla
(2007): the innovation itself (the ABC system), the trained personnel with related
knowledge, personnel with no background on the system, and the communication channels
connecting those who know about the innovation to those who don't. These ways can in fact
include internal and external ways like media.
According to Bj0rnenak (1997), the media has its role in spreading the principles
of the ABC system, but does not exercise such significant influence on the implementation
decision. Jones (1985) was actually the first to identify the real pressure of holding
companies on the subsidiary companies to apply the ABC system. A study by Walley et al
(1994) surveying 20 enterprises deduced that 2 organizations have adopted the ABC system
as a response to their parent company. This fact is further supported by the study of Ballas
and Venieris (1996) of 14 organizations applying the ABC system out of which 4 are
influenced by their multinational holding companies. A study by Moalla (2007) on 80
enterprises has the following results regarding the factors influencing the ABC diffusion in
Tunisia:the university is considered as the first important factor in spreading information
about the ABC system, followed by conferences and seminars. So the interpersonal
channels' effect has outweighed that of mass media. Moreover, regarding the effect of the
holding companies on subsidiaries' adoption of ABC system, results have confirmed that
no relation exists between adopting ABC and being a subsidiary of an adopted mother
company of ABC. In contrast, the subsidiaries adopt the ABC system exactly as independent
companies do. Chea (2011) identifies the steps that must be taken by an entity to be ready to
apply
the ABC system. The first one is to form a cross-functional team. Second, develop the cost
objectives. Third, determine the homogenous activities that share similar functions or jobs,
and the cost driver for every activity. Fourth, allocate costs already determined to cost
objects. Probably, if one of these steps was evaluated by the company as difficult to apply,
managers would be reluctant about applying the ABC in the first place (Chea, 2