Tamara Theresia Sivano, Clara Sinta, Miftahul Rizkiyah, Naqiyyah Ghina Kurnia Vanesca, Rifani Akbar Sulbahari

Activity-Based Budgeting: Innovative Budgeting or an Efficiency Illusion?

Introduction

Activity-based budgeting: innovative budgeting or an efficiency illusion? . Activity-Based Budgeting: innovation or illusion? This review assesses ABB/ABM effectiveness, finding it boosts cost accuracy but often fails without robust commitment and data.

Abstract

This study evaluates the effectiveness of Activity-Based Budgeting (ABB) and Activity-Based Management (ABM) implementation to determine whether these systems constitute a strategic innovation or merely an illusion of efficiency. Employing a Systematic Literature Review (SLR) methodology in accordance with the PRISMA 2020 protocol, this research synthesizes 19 internationally reputable articles published between 2011 and 2025. The findings reveal a significant dialectic in global budgeting practices; while the majority of the literature positions ABB/ABM as a genuine innovation that enhances cost accuracy and resource transparency, the study also uncovers an "administrative illusion." In such cases, systems are often exploited for strategic behavioral manipulation or hindered by organizational cultural resistance. Additionally, neutral outcomes are observed in several contexts due to technical complexities and bureaucratic barriers. This study concludes that the transformation from traditional budgeting to activity-based systems requires robust institutional commitment and advanced data infrastructure to prevent the system from becoming a mere administrative formality. Theoretically, this research contributes to the contingency theory of management accounting, while practically, it provides a framework for organizations to assess their readiness for ABB/ABM adoption. Penelitian ini mengevaluasi efektivitas implementasi Activity-Based Budgeting (ABB) dan Activity-Based Management (ABM) untuk menentukan apakah sistem ini merupakan inovasi strategis atau sekadar ilusi efisiensi. Dengan menggunakan metode Systematic Literature Review (SLR) sesuai protokol PRISMA 2020, penelitian ini menyintesis 19 artikel bereputasi internasional yang diterbitkan antara tahun 2011 dan 2025. Temuan menunjukkan adanya dialektika yang signifikan dalam praktik penganggaran global; mayoritas literatur memosisikan ABB/ABM sebagai inovasi nyata yang meningkatkan akurasi biaya dan transparansi sumber daya. Namun, penelitian ini juga mengungkap adanya "ilusi administratif," di mana sistem dieksploitasi untuk manipulasi perilaku strategis atau terhambat oleh resistensi budaya organisasi. Selain itu, hasil netral ditemukan pada beberapa konteks akibat kompleksitas teknis dan hambatan birokrasi. Penelitian ini menyimpulkan bahwa transformasi dari penganggaran tradisional ke sistem berbasis aktivitas memerlukan komitmen institusional yang kuat dan infrastruktur data yang mumpuni agar tidak menjadi formalitas administratif semata. Secara teoretis, penelitian ini berkontribusi pada teori kontingensi akuntansi manajemen, sementara secara praktis, penelitian ini menyediakan kerangka kerja bagi organisasi untuk menilai kesiapan adopsi ABB/ABM.

Review

This systematic literature review by [Authors' Names - not provided, so I'll omit] rigorously tackles a critical question in management accounting: whether Activity-Based Budgeting (ABB) and Activity-Based Management (ABM) truly represent strategic innovation or merely an illusion of efficiency. Utilizing the robust PRISMA 2020 protocol, the study synthesizes findings from 19 internationally reputed articles published between 2011 and 2025. This methodological rigor provides a strong foundation for evaluating a concept that has long been a subject of debate within both academic and professional circles. The paper's timely contribution offers a much-needed comprehensive overview of the current state of ABB/ABM implementation and its perceived effectiveness. The study uncovers a significant dialectic within global budgeting practices, highlighting both the promise and pitfalls of ABB/ABM. On one hand, the research confirms the prevailing view that these systems can act as genuine innovations, substantially enhancing cost accuracy and resource transparency. On the other hand, it critically exposes an "administrative illusion," where systems are susceptible to strategic behavioral manipulation or stifled by organizational cultural resistance. The observation of neutral outcomes due to technical complexities and bureaucratic barriers further underscores the nuanced reality of adoption. This leads to the crucial conclusion that successful transformation from traditional to activity-based systems hinges on strong institutional commitment and advanced data infrastructure, preventing ABB/ABM from becoming a superficial administrative formality. The theoretical and practical contributions of this research are noteworthy. By illustrating the contingent factors that determine the success or failure of ABB/ABM, the study enriches the contingency theory of management accounting, providing a more granular understanding of contextual influences. Practically, the synthesis offers organizations a valuable framework to assess their readiness for ABB/ABM adoption, guiding them to proactively address potential pitfalls related to data infrastructure, cultural resistance, and commitment. This paper is thus an essential read for academics interested in management accounting theory and practitioners contemplating or struggling with the implementation of activity-based systems, offering balanced insights that move beyond simplistic evaluations.

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