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Environmental Activities

Environmental Activities. Prevention activities Assessment activities Control activities Failure activities. Measuring and Reporting Environmental Costs. Traditional systems must be augmented by interviews Schedule costs into hazardous & non-hazardous categories

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Environmental Activities

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  1. Environmental Activities • Prevention activities • Assessment activities • Control activities • Failure activities STRATEGIC COST MANAGEMENT - BA122B – Fall 2010 Slide 11-1

  2. Measuring and Reporting Environmental Costs • Traditional systems must be augmented by interviews • Schedule costs into hazardous & non-hazardous categories • Classify the costs by activities • Report and analyze routinely STRATEGIC COST MANAGEMENT - BA122B – Fall 2010 Slide 11-2

  3. Managing Environmental Costs • Product design • Process design • PP&E acquisition • Operational venue • Encourage value chain participation • Routinely integrate MMEC into the decision making process • Checklists • EC Summaries • Post-mortem reviews STRATEGIC COST MANAGEMENT - BA122B – Fall 2010 Slide 11-3

  4. MMEC—TBC Impact • Technical • Improved decision relevance • Insight contrary to common beliefs • Better process identification • Environmental cost insight • Behavioral • EC visibility: what gets measured; gets done STRATEGIC COST MANAGEMENT - BA122B – Fall 2010 Slide 11-4

  5. MMEC—TBC, continued • Cultural • Societal value sharing • Changing environmental mindsets • Compliance and control vs. avoidance • Role of finance as “facilitator” • Can bring focus to this important issue STRATEGIC COST MANAGEMENT - BA122B – Fall 2010 Slide 11-5

  6. MMEC—Strategic Implications • Quality: consumers drawn to environmentally concerned companies…green issues • Cost: environment costs are huge • Time: unexpected “events” are time consuming and defocusing • Think about the movie “Erin Brocovich” STRATEGIC COST MANAGEMENT - BA122B – Fall 2010 Slide 11-6

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