The Application of a Cost Management System (CMS) within the Changing Dynamics of Organisations

Contingency theory suggests that cost-management systems (CMS) must be aligned with organisational and environmental characteristics, however, empirical evidence remains fragmented and is drawn largely from advanced economies. It remains unclear whether the importance of specific contingent factors varies when digital infrastructure, capital resources, and competitive pressures differ substantially. This study addresses that gap by investigating the determinants of CMS adoption in Sri Lanka a developing, post-conflict economy through survey data from 186 firms in the manufacturing and service sectors and binary logistic regression analysis. The results reveal that external and structural contingencies, technological capability, market competition, organisational size, financial strength and the burden of cost justification are significantly associated with CMS adoption, whereas internal process variables such as information quality and routine change are not. Prior studies indicate that these patterns deviate from evidence in developed settings, thereby refining contingency theory by demonstrating that foundational resource constraints can eclipse “soft” informational drivers. Conceptually, the paper advances knowledge by specifying how resource scarcity and infrastructure maturity moderate the traditional contingency framework; practically, it offers policymakers and managers a prioritisation schema for phasing CMS investment in resource-constrained contexts. In doing so, the study extends CMS scholarship beyond its prevailing developed economy focus and provides a transferable analytical model for other emerging and developing markets.