Impact of activity-based management to improve performunce from un internal operations perspective

Abstract

In this research, we study the Activity-Based Costing (ABC) which is considered as an effective accounting system that integrates financial and nonfinancial information describing the causal relationships between resources, activities and products. The outputs of the activity-based costing system are called Activity-Based Information (ABI), which is used to measure performance and make different decisions in the context of activity-based management (ABM). Activity-based management is a management approach that involves the implementation of several actions resulting from the analysis of the findings of activity-based accounting in two aspects: (1) Strategic ABM, (2) Operational ABM. According to the model we have proposed in this study, activity-based information can be employed to improve the performance from the internal processes perspective of the Balanced Scorecard (BSC): (1) cost control, (2) quality improvement and (3) time management. We have selected the pharmaceutical institutions as a field of study and SAIDAL Complex the Algerian state-owned pharmaceutical company as a case study, in which we attempt to develop and analyze the phenomenon using the exploratory approach according to abductive reasoning. The study concludes with a set of findings that prove the active role of activity-based management and its ability to improve company performance from the internal processes perspective.