An activity based management methodology for evaluating business processes for environmental sustainability

Abstract

PurposeThis paper seeks to introduce a conceptual methodology to support decisions about environmental systems.Design/methodology/approachThe methodology incorporates activity‐based costing and management, the analytic hierarchy process, and business process modeling using the IDEF0 method.FindingsAn illustrative example that applies the methodology to a semiconductor manufacturing facility is presented in the paper. The company used the results to analyze a process improvement.Research limitations/implicationsThe complexities and nuances of the approach will require facilitation and support. Making the technique more transparent and available to management is a barrier to its diffusion and application.Practical implicationsPotential managerial application and implications include areas such as product cost management, business process design and technology selection.Originality/valueApplication of the methodology encourages management to more fully assess the environmental implications of their decision in evaluating alternative technological processes while also allowing for the inclusion of other organizational decision dimensions.