DEINSTITUTIONALIZATION OF ACTIVITY BASED COSTING: ANALYSIS FROM THE NEW INSTITUTIONAL SOCIOLOGY PERSPECTIVE

Abstract

This study aimed at investigating, under the perspective of New Institutional Sociology, what factors led to the weakening and abandonment of Activity Based Costing in two companies. The study was based on a qualitative research method through case studies and evaluated the stages of ABC’ adoption, institutionalization stages and variables of deinstitutionalization. As a result, Beta reached the third stage and Gamma reached the second ABC adoption stage. The normative isomorphism encouraged by the recommendation of consulting firms presented a lot of importance in both companies, while the remaining isomorphism, mimetic, coercive and competitive, had smaller relevance. Neither company reached the stage of full institutionalization, reaching only the pre-institutional one. Evaluating the factors of abandonment and deinstitutionalization of ABC, the assumption with highest expression was social pressure, for not bringing informational innovation, not being a requirement of the head quarter, besides the lack of fiscal incentives. In the categorization of the critical points, ten factors were mapped to the abandonment of ABC: six factors of which are not covered by and four that reinforced the current literature. The conclusion highlights the number of findings that allowed the development of a basic structure for academics and practitioners to analyse it before incurring investments and allocation of employees who will not bring the expected financial results due to the discontinuity of the system adopted by the company.