Decentralized Structures and Organizational Performance: The Mediating Role of Activity-Based Costing Implementation
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The aim of this paper is to empirically examine the mediating effect of activity based costing (ABC) implementation on the relationship between decentralized structures and organizational performance from a contingency theory perspective. The decentralized structures are investigated using two dimensions: the vertical and horizontal structures. Since there is little evidence on the effect of decentralized structures on ABC implementation from Arab countries, this paper uses Iraqi manufacturing companies as the sample of the study. The data is analyzed using a PLS3 and the results indicate that vertical decentralized structure is positively and significantly associated with ABC implementation and organizational performance. ABC implementation is also positively and significantly associated with organizational performance. In contrast, the results show that horizontal decentralized structure has a strong negative effect on both ABC implementation and organizational performance. This study also demonstrates that ABC implementation has no mediating effect on the relationships of both the decentralized structures and organizational performance.
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