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A Study of Environmental Management Investment Allocation

Shiaw‐Wen Tien (Graduate Institute of Technology Management, Chung‐Hua University, 30 Tung‐Shiang, Hsin‐Chu, Taiwan, ROC)
Ting‐Ting Chang (Department of Industrial Management, Lunghwa University of Science and Technology No. 300, Sec. 1, Wanshou Rd., Guishan, Taoyuan County 33306, Taiwan)
Yi‐Chan Chung (Department of Industrial Engineering and Management, Ta‐Hwa Institute of Technology, 1 Ta‐Hwa Road, Chung‐Lin, Hsin‐Chu, Taiwan, ROC)
Ching‐Piao Chen (Department of Industrial Engineering and Management, Ta‐Hwa Institute of Technology, 1 Ta‐Hwa Road, Chung‐Lin, Hsin‐Chu, Taiwan, ROC)
Chih‐Hung Tsai (Department of Industrial Engineering and Management, Ta‐Hwa Institute of Technology, 1 Ta‐Hwa Road, Chung‐Lin, Hsin‐Chu, Taiwan, ROC)

Asian Journal on Quality

ISSN: 1598-2688

Article publication date: 21 August 2008

252

Abstract

The 21st century is a new century of environmental protection. Environmental protection is one of the most important subject matters yet to come. Moreover, as the public pays more attention to environmental problems, enterprises should increase their investment in environmental management. Therefore, determining the investment level for environmental management and allocating the investment to associated environmental management activities has become a major task. The principal and agent theory and sales response functions are used for analysis in this research. The allocation of capital investment in environmental management is found to have significant impact on the aggregate sales response, aggregate profit and investment level. Therefore, in preparing the budget for environmental management, enterprises should focus on investment allocation decisions, determine the investment level and allocation method using integrated means, and apply submarket data in the allocation decision‐making process. In other words, in setting the investment level, executive management should take managers’ willingness into consideration. In allocating capital investment, managers should identify the optimal allocation method based on submarket characteristics.

Keywords

Citation

Tien, S., Chang, T., Chung, Y., Chen, C. and Tsai, C. (2008), "A Study of Environmental Management Investment Allocation", Asian Journal on Quality, Vol. 9 No. 2, pp. 57-77. https://doi.org/10.1108/15982688200800017

Publisher

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Emerald Group Publishing Limited

Copyright © 2008, Emerald Group Publishing Limited

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