Provided by James R. Martin, Ph.D., CMA
Professor Emeritus, University of South Florida
1. Briefly describe Activity Based Management (ABM) as defined by Johnson, the CAM-I conceptual design, Brimson, Turney and Campi? (See the CAM-I Concepts summary, the ABM Models summary, Overall ABM graphic, and Campi Summary).
3. Johnson indicates that ABM requires two types of information across the entire value chain. Explain what he is referring to and how the information is used. (See the Johnson 88 summary and Exhibit 8-12).
4. Johnson indicates that managing waste in operating activities involves four steps. List and discuss these steps. (See the Johnson 88 summary).
5. In addition, Johnson makes several recommendations (in various papers) for a company to follow to promote continuous improvement. List and discuss some of these recommendations. (See Johnson 89 summary).
6. Are any of the ABM models compatible with JIT and TOC? If so, explain which models are compatible, which models are not compatible and the source of the incompatibility. (See the ABM Models summary, Chapter 8, Palmer & Vied, Swenson 98 and the Greenwood & Reeve 92 summaries).
7. Think of the various ABM models discussed above in relation to the four audiences discussed in Chapter 10 of Relevance Lost. Is the financial and non-financial information intended for the same audiences? Explain your answer. (See Exhibit 2-4).
8. In his article, "Its time to stop overselling ABC concepts" Johnson argues that cross functional activity analysis is different from process analysis. Explain how these concepts are different? What is Johnson’s point? (See Johnson 92 summary).
11. When a company uses several types of performance measurements including financial measurements and non-financial measurements (e.g., unit costs, labor efficiency, capacity utilization, price and spending variances, cycle time, number of defects, inventory levels, inventory turnover, space utilized) what question will managers ask and how will they respond to the answer? What do you think Deming, Goldratt and Johnson would say about this?
12. Discuss the concept of control from the top-down and bottom-up perspectives? Indicate how Anthony’s framework discussed in Relevance Lost could be used to reconcile the apparent conflict between these two approaches. (See the See Chapter 7question 99 and the Anthony 64 summary).
13. What is the main argument against ABM? (See Johnson 92 summary).
15. Consider the Johnson and Kaplan debate concerning overselling activity based concepts that appeared in Management Accounting. One might argue that Tom and Bob don’t really disagree on the key issues because they aren’t talking about the same thing. Discuss this view of their debate. (See Johnson 92 and Kaplan 92 summaries Exhibit 2-4 for some ideas).
16. Compare the TOC concept of managing constraints with the ABM concept of managing activities. Is this the same idea?
17. Peter Turney suggests that ABM puts ABC-information in the hands of people at the lower levels of the organization ("power down the organization"). In other words, accounting information is power and can be used to empower people at the lower levels. Discuss this idea in relation to the issue concerning whether ABC should be used as a replacement system or a stand alone system and in terms of the four audiences referred to in Chapter 10 of Relevance Lost (See Exhibit 2-4 and the Martin 98 summary for some ideas).
18. Discuss Turney’s "power down" idea, in the question above, in relation to the concepts associated with the theory of constraints, e.g., throughput, drum-buffer-rope.
19. Discuss Turney’s "power down" idea in relation to the concepts associated with JIT, e.g., cellular arrangement, kanbans, SPC. (See the Swank summary).
20. Keys argues that there are three stages of ABM and the first stage is ignored. What is he talking about? (See Keys 94 summary).
21. Keys and Lefevre make a case for departmental ABM. How is this different? (See the Keys & Lefevre summary).
23. "ABM is an attempt by the accounting community to make accounting relevant, but it will fail as long as the short-term-capital-market-GAAP driven system is in place". Discuss this statement from both sides of the issue. (See Pryor's prescriptions. The survey results by Hughes, & Gjerde are also useful in responding to this type of negative statement).
25. The CAM-I ABPB Interest Group developed a new approach referred to as Activity-Based Planning and Budgeting. How is this different from the traditional approach to planning and budgeting? (See the Sandison, Hansen & Torok summary).
See the Questions related to CAM-I.