Activity-based costing diusion across organizations: an exploratory empirical analysis of Finnish ®rms

This study aims to explain what drives innovation di€usion in management accounting during its various phases. Based on Abrahamson [Abrahamson, E. (1991). Managerial fads and fashions: the di€usion and rejection of innovations. Academy of Management Review, 16, 586±612], four perspectives with potential to explain the di€usion of accounting innovations are identi®ed: the ecient-choice, forced selection, fad and fashion perspectives. The di€usion of activity-based costing (ABC) in Finland provides an empirical context to study how these four perspectives apply to management accounting innovation. Data comes from a set of four surveys (total n=490, response rate 39.5%, 114 ABC cases), from interviews of consultants, academics and software industry employees, and from archival sources. The study proposes that the driving forces behind innovation di€usion in management accounting change over the course of di€usion. Ecient choice may explain the earliest adoptions, whereas fashion-setting organizations exert considerable in ̄uence in the take-o€ stage. Later on, the in ̄uence of fashion setting organizations diminishes. Further di€usion is explained both by mimetic behaviour and ecient-choice. # 1999 Elsevier Science Ltd. All rights reserved.