Activity-based cost management (ABCM) applied to an environmental, safety, and health (ES&H) department and program

In this study, activity-based cost management (ABCM) was applied to a fire protection engineering department and a respiratory protection program. The basic proposition examined was that ABCM, which examines both cost assignment and work activities linked together as a business process, can be used to quantify costs and generate business process information about the operation of environmental, safety, and health (ES&H) departments. The resultant data can be used to improve decision making, better manage and control activity transactions that generate costs, and solve complex budgetary and business problems. As a result, better decisions can be made to improved health protection provided to workers and the public.;A descriptive case study design was used to systematically collect data and observations about the application and utility of ABCM in occupational and environmental health organizations. A systematic process was used for collecting business process data through process mapping, and stakeholder and activity analyses. An ABCM model was designed and populated with cost and business process data collected during field studies. Quantitative analyses of the ABCM model were used to determine the drivers of cost in each organization; the influence of activity transactions on cost; and the cost of activities, products, and services. This study has shown that: (1) ABCM can be applied in occupational and environmental health organizations; (2) the data provided to managers from traditional managerial accounting methods do not adequately describe an organization's work activities nor identify the amount of specific resources required to make that organization functional; and (3) ABCM provided a structure that gives managers an opportunity to examine (a) work activity transactions and why they occur, (b) how decisions are made with new data, and (c) how the pieces of an organization fit together to achieve stated goals. By applying ABCM in these two case studies, insight was developed about how each organization works and why. Finally, this work has created the foundation for a subsequent study about the influence and effect that ABCM will have on improving conditions in the workplace as measured by selected occupational health and safety outcomes.