Is Cost of Safety Management Waste or Strategic Investment to Improve Organizational Performance?

Abstract

The purpose of this research is to investigate differences in the organizational performance which is measured in terms of employees’ safety behavior and firm's average net profit. In addition, it examines the moderating role of safety management costs invested by the firms on the relationships between safety management style and organizational performance. The data were collected from 341 firms via the Occupational Safety and Health Company Survey (2015), the Electronic Disclosure System (DART) of the Financial Supervisory Service, and Small Business Status Information System (SMINFO). The results of the analysis indicated that both safety and financial performance were better when the firms take control of safety management than when safety is managed by a concurrently employed person or outsourcing. We also found that the costs of safety management played a buffering role on the negative effects of such indirect safety management on organization performance. Implications and future research directions were then discussed.