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Factors influencing the application of the ABC model in Vietnamese textile and
garment businesses
The results of expert interviews, literature review, and surveys indicate that the
application of the ABC model at Vietnamese textile and garment businesses is influenced
by the following factors:
- Managerial awareness: According to Al-Omiri & Drury (2007), the usefulness of
cost information is one of the factors ensuring the success and sustainability of ABC
accounting implementation. Information provided by the ABC model supports managers
in cost reduction decisions or pricing policies, and further, in long-term strategic decisions.
The role of senior management in ABC accounting implementation has been studied by
many authors (Aldukhil, 2012; Madwe et al., 2020; Pham et al., 2020). Therefore, with the
help of senior management, the success rate of ABC accounting applications in the unit
will increase significantly (Brown et al., 2004; Madwe et al., 2020). Thus, the
understanding and concern of managers, especially senior managers, about the benefits
of applying ABC has a positive influence on its adoption. Direct surveys at businesses also
show that in large enterprises such as Phong Phu, May 10, May Duc Giang, An Phuoc, etc.,
senior managers and general accountants also have a certain understanding of the
advantages and disadvantages of applying ABC and all have a desire to improve
operational efficiency through the appropriate implementation of ABC.
- Accounting staff qualifications: ABC accounting requires more people to
monitor costs than the traditional model, and cost identification is often complex, so ABC
accounting demands a very high level of competence from both accounting personnel
and managers. Kaplan & Anderson (2004) suggest that another reason hindering the
adoption and implementation of ABC accounting is the lack of consulting experts and the
high costs involved in hiring them. Therefore, the most cost-effective solution is to utilize
internal resources by improving the qualifications of accounting staff. Duc Giang Garment
and Song Hong Garment are two exemplary businesses that maximize the use of internal
accounting personnel to apply the ABC model.
- Competitive pressure: pressure from competition with other businesses in the
industry, and competition with businesses in other countries such as India, Bangladesh,
etc., in terms of lowering costs and saving expenses has created an incentive for
businesses to implement ABC accounting (Kaplan & Anderson, 2004; Pham et al., 2020).
Therefore, competitive pressure positively influences the intention to adopt ABC. Asian
garment manufacturers are a prime example of applying ABC to save costs, reduce prices,
and increase competitiveness.
- Characteristics of textile and garment production: Complex production systems
become more advantageous when the cost of data collection and processing decreases
(Cropper & Cook, 2000). According to ABC theories, the condition for application is the
existence of a specific production process to determine activity costs. Vietnamese textile
and garment businesses currently offer a diverse range of product types, specific
production processes, and fairly comprehensive economic and technical standards,
making them favorable for applying ABC. At the same time, the implementation and
selection of the ABC model also depend heavily on the characteristics of the production
process.
- Business size: Because ABC requires significant costs and high-quality human
resources, the size of the business significantly influences the choice and application of

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