Development of a Model Linking Physical Asset Management to Sustainability Performance: An Empirical Research

Damjan Maletič,Basim Al-Najjar,Matjaž Maletič,Boštjan Gomišček

doi:10.3390/su10124759

Damjan Maletič, Basim Al-Najjar + Show 2 more

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https://doi.org/10.3390/su10124759

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Abstract

This article is aimed at exploring the relationship between physical asset management (PAM) practices and sustainability performance. A framework of interrelated constructs was developed based on the existing literature and consequently tested through empirical study. Survey data were collected from organizations operating in six European countries (i.e., Greece, Poland, Slovakia, Slovenia, Sweden, and Turkey) and analyzed using Partial Least Squares Path Modeling (PLS-PM). The results offer support for the proposed hypotheses, showing that PAM practices positively influence the sustainability performance outcomes, namely economic, environmental, and employee-related social performance. Overall, this study demonstrates that a PAM framework can be conceptualized by four sub-constructs, namely physical asset risk management, physical asset performance assessment, physical asset lifecycle management, and physical asset policy and strategy. Finally, this study brings to light some theoretical and managerial implications as well as directions for future research. The findings of the study underscore PAM areas in which managers should focus on in order to optimize costs, performance, and risk exposures concerning the physical assets, and therefore enhance sustainability performance.

Highlights

Organizations continuously search for new ways to improve performance and to get maximum return on their investments, i.e., physical assets
This study draws on the assumption that physical asset management (PAM), which represents a systematic and structured process covering the whole lifecycle of physical assets, enhances sustainability performance
This research investigates the relationship between PAM practices and sustainability performance

Summary

Introduction

Organizations continuously search for new ways to improve performance and to get maximum return on their investments, i.e., physical assets. PAM has received considerable attention as having an important role in the management of the lifecycle of an asset as a whole, pursuing economic and physical performance, integrating risk measures, addressing the PAM within broader strategic and human perspectives, especially with the objective of improving both efficiency and effectiveness of resources [5]. The concept of sustainability plays an important role in asset management The reason for this lies in the fact that there exists a strong link between effective deployment of PAM and long-term sustainability—from the economic, environmental, and social point of view [3]. In support of this statement, it was evidenced in the literature (e.g., Valkokari et al [8]; Lucato et al [9]) that manufacturing has an enormous impact on all aspects of sustainable development

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