MEDIATING IMPACT OF ACTIVITY BASED COSTING (ABC) ADOPTION ON THE RELATIONSHIP BETWEEN ORGANIZATIONAL FACTORS AND SME PERFORMANCE

Abstract

Small and medium-sized enterprises (SMEs) in agriculture, manufacturing, trade, and services drive Nigeria's economy. However, despite the SME sector's substantial participation in the economy, a lot still needs to be done to ensure that the businesses maintain reasonable performance. It is as a result of this that the study aims to examine the effect of ABC adoption on the relationship between organizational factors and SME performance. A descriptive research design was used for the purposes of this study. 11,663 registered SME in Lagos State were the study's population. The study employed a simple random sampling method, and 387 sample size was determined through Taro Yamane sample size formula. Both descriptive and inferential statistics were used to examine and present the data that was acquired. While the inferential part of the study is concerned with testing the formulated hypotheses using partial least squares (PLS), the descriptive aspect of it is concerned with the frequency table, mean, and standard deviation. The results of the mediation study show that the relationship between organizational factors and SME performance is mediated by the adoption of the ABC system. The findings showed that there is a positive relationship between organizational factors and SME performance. Thus, the study draws its conclusion and suggests that organizational factors and ABC adoption should not be undermined because every organization needs administrative support, team resources, and coordination techniques. ABC adoption on the other hand will enable SME to reduce overhead costs and helps to boost the SME performance