Total Cost Assessment: Catalyzing Corporate Self-Interest in Pollution Prevention

White, Allen; Becker, Monica

doi:10.2190/ns2.3.i

Cited by 8 publications

(4 citation statements)

References 2 publications

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“…• It cannot handle decision-making under genuine uncertainty since it assumes that the decision-maker is always rational and has access to complete information concerning alternatives and outcomes. Full cost accounting (FCA) Identiÿes and quantiÿes the full range of costs throughout the life cycle of the product, product line, process, service or activity [28] Identiÿes and quantiÿes (1) direct, (2) indirect and (3) intangible costs Full cost environmental accounting (FCEA) Embodies the same concept as FCA but highlights the environmental elements [24] Varying Total cost assessment (TCA) (I) Long-term, comprehensive ÿnancial analysis of the full range of internal costs and savings of an investment [28,29] (1) Internal costs and savings Total cost accounting (TCA) (II) Term used as a synonym for either the deÿnition given to FCA or as a synonym for TCA [28] (1) Conventional costs, (2) hidden costs, (3) liability costs, (4) less tangible costs Life cycle accounting (LCA)…”

Section: Theoretical Assumptions In the Lcc Approachmentioning

confidence: 99%

The life cycle costing (LCC) approach: a conceptual discussion of its usefulness for environmental decision-making

Gluch

Baumann

2004

Building and Environment

400

198

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Ten LCC-oriented environmental accounting tools suggested as useful in environmental decision-making have been identiÿed. However, their implementation in the building industry seems to be limited, which opens up for a conceptual discussion. The purpose of this article is to discuss theoretical assumptions and the practical usefulness of the LCC approach in making environmentally responsible investment decisions. LCC's monetary unit and extended scope may speak in favour of using LCC but LCC fails to handle irreversible decisions, neglects items that have no owner and does not consider costs to future generations. Moreover, LCC does not take into account the decision makers' limited ability to make rational decisions under uncertainty. LCC's practical usefulness is constrained by its oversimpliÿcation to a monetary unit, the lack of reliable data, complexity of the building process and conceptual confusions. To handle these inconsistencies in future development of environmental decision support tools three research solutions are proposed.

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Section: Theoretical Assumptions In the Lcc Approachmentioning

confidence: 99%

The life cycle costing (LCC) approach: a conceptual discussion of its usefulness for environmental decision-making

Gluch

Baumann

2004

Building and Environment

400

198

View full text Add to dashboard Cite

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“…To that end, they reconfigured their manufacturing processes and products to accommodate a substitute gas that was seen as being a least-cost alternative. In doing so, first it precludes the need for a formal evaluation process and second, reflects the view that regulatory compliance is not expected to yield a financial return (White and Becker, 1992;Clarke et al, 1994;Walley and Whitehead, 1994).…”

Section: Discussionmentioning

confidence: 99%

“…Evidence suggests that companies typically oppose the introduction of environmental regulation on the grounds of higher costs and reduced competitiveness (Barrett, 1991;Porter, 1991;Porter and van der Linde, 1995). Further, as environmental costs at many companies are significant, and complying with environmental law is usually not expected to yield a financial return, responding to environmental regulation in a cost-efficient manner is typically regarded as crucial (White and Becker, 1992;Clarke et al, 1994;Walley and Whitehead, 1994). This evidence underlies the first proposition of the study:…”

Section: Literature Reviewmentioning

confidence: 99%

An examination of the role of financial investment appraisal methods in the context of international environmental regulation

Dunk

1999

Accounting, Auditing &Amp; Accountability Journal

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Domestic refrigerator manufacturers have had to cease their use of CFCs following the implementation of the Montreal Protocol. Two primary substitute refrigerants have been adopted; one being HFC-134a and the other being hydrocarbons. Given the availability of hydrocarbons and pressure from both the green movement and the Framework Convention on Climate Change, there has been a marked increase in their use. The purpose of the paper is to examine the role of financial investment appraisal methods in the decision processes of refrigerator manufacturers in their responses to the phasing out of CFCs. The contribution made by financial decision tools to their decision-making processes arising from the CFC phase-out has not been reported. The decision choices of refrigerator manufacturers is of importance to the issue of whether their responses to the Protocol reflect a strategy designed to enhance long-term competitiveness, or whether they were in response to immediate pressures to satisfy regulatory, cost and other shortterm interests. To address these issues, field study data were collected from refrigeration and refrigerant companies operating in Australia, Europe, New Zealand and the UK.With environmental concerns high on the social and political agenda there has been a corresponding increase in the magnitude and stringency of environmental regulation affecting manufacturing industry (e.g. Post and Altman, 1992;Burritt, 1995;Porter and van der Linde, 1995). Recent forms of regulation typically do not specify how organizations are to comply; firms are left to evaluate not only the technological merits of alternatives, but also their short and long-term financial implications. One particular issue manufacturing industry has faced is the mandatory phase-out of chlorofluorocarbons (CFCs) following the Montreal Protocol. CFCs are or have been used as the refrigerant in domestic, commercial, industrial and automotive applications (Parson, 1993). Despite their widespread application, the focus of this study is on CFCs and

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“…Support for the USEPA (1995a) perspective that organizations can manage environmental issues through their control systems is contained in the literature (Judge and Douglas 1998;Beets and Souther 1999;Moneva and Llena 2000). For example, evidence indicates that increasingly stringent environmental standards, prohibitions on the disposal of many wastes, and restrictions on environmentally unfriendly products are incentives for firms to address environmental issues through their management control systems (White and Becker 1992;Mannion 1996;Pasurka 2001). Doing so would be advantageous, as Corrigan (1998) argued that the incorporation of environmental factors into a firm's decision processes contributes to the containment of environmental costs and to the enhancement of an organization's long-term viability.…”

Section: Introductionmentioning

confidence: 99%

Assessing the Effects of Product Quality and Environmental Management Accounting on the Competitive Advantage of Firms

Dunk

2007

AABFJ

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Arguments have been made in the literature that product quality provides a basis for establishing and maintaining a firm's competitive advantage. Proposals suggest that the framework provided by environmental management accounting facilitates product quality having the attributes that are likely to contribute to competitive advantage, and hence it is likely that environmental accounting plays an influential role in that relation. The purpose of this study is to examine empirically whether there is evidence for environmental management accounting impacting on the relation between product quality and competitive advantage. These findings support the view that environmental management accounting has an important role to play in firms. Specifically, the results of the study suggest that product quality contributes to a firm's competitive advantage when the reliance on environmental management accounting is high. However, it fails to do so when the reliance on environmental management accounting is low.

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Total Cost Assessment: Catalyzing Corporate Self-Interest in Pollution Prevention

Cited by 8 publications

References 2 publications

The life cycle costing (LCC) approach: a conceptual discussion of its usefulness for environmental decision-making

The life cycle costing (LCC) approach: a conceptual discussion of its usefulness for environmental decision-making

An examination of the role of financial investment appraisal methods in the context of international environmental regulation

Assessing the Effects of Product Quality and Environmental Management Accounting on the Competitive Advantage of Firms

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