Professional Documents
Culture Documents
Arturo A. Keller
Bren School of Environmental Science & Management University of California, Santa Barbara
ESM 595F
Hidden costs
Site
remediation costs Product-related legal expenses Regulatory costs PR expenses Opportunity cost of clean technologies not adopted DfE, PP engineering costs
Bren School of Environmental Science & Management
5
Institutional Impediments
Traditional accounting doesnt capture engineering & accounting data needed for decision making Data collected is aggregated in wrong format, losing environmental context Line managers not responsible for most environmental costs
Managerial Information
Detailed
cost breakdown
Joint costs expense of tracking costs on individual product line basis technical difficulties of measuring productspecific material flows and emissions negative incentive to collect detailed info
Bren School of Environmental Science & Management
9
Unprofitable products?
Internal
+ External Costs > Price Competitive market Market leader Large portion of current revenue
Bren School of Environmental Science & Management
10
11
managerial attention to problem areas Provide informational support for managerial decisions Promote harmonized goals throughout the organization
Bren School of Environmental Science & Management
12
13
14
15
Bottom Line
Need
to restructure incentive compensation system (multiobjective) Establish priorities Tailor to individual firm Adapt to changing social climate
Bren School of Environmental Science & Management
16