Implementing activity-based management.1" Robert Lutz. then president and chief operating officer at Chrysler, was determined to replace the company's old costaccounting system with a system thai could report costs by process and that could separate value-added from non-value-added activities. After reading an article about activity-based costing, Lutz decided this was the system for Chrysler.

As Chrysler introduced ABC, many employees at various levels resisted. The new system represented a threat by changing the existing power structure and revealing inefficient processes hidden by the old cost-accounting system.

Write a short report to Mr. Lutz explaining why you think the Chrysler employees opposed ABC. Recommend steps to take to mitigate the resistance of employees to the new activity-based costing system.