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A management accounting perspective on safety

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A management accounting perspective on safety. / Tappura, Sari; Sievänen, Matti; Heikkilä, Jouko; Jussila, Ari; Nenonen, Noora.

In: Safety Science, Vol. 71, No. January, 2015, p. 151-159.

Research output: Contribution to journalArticleScientificpeer-review

Harvard

Tappura, S, Sievänen, M, Heikkilä, J, Jussila, A & Nenonen, N 2015, 'A management accounting perspective on safety', Safety Science, vol. 71, no. January, pp. 151-159. https://doi.org/10.1016/j.ssci.2014.01.011

APA

Tappura, S., Sievänen, M., Heikkilä, J., Jussila, A., & Nenonen, N. (2015). A management accounting perspective on safety. Safety Science, 71(January), 151-159. https://doi.org/10.1016/j.ssci.2014.01.011

Vancouver

Tappura S, Sievänen M, Heikkilä J, Jussila A, Nenonen N. A management accounting perspective on safety. Safety Science. 2015;71(January):151-159. https://doi.org/10.1016/j.ssci.2014.01.011

Author

Tappura, Sari ; Sievänen, Matti ; Heikkilä, Jouko ; Jussila, Ari ; Nenonen, Noora. / A management accounting perspective on safety. In: Safety Science. 2015 ; Vol. 71, No. January. pp. 151-159.

Bibtex - Download

@article{3737587c56a448538d285ec2223c572f,
title = "A management accounting perspective on safety",
abstract = "Management accounting supports decision making in organisations by providing managers with relevant information and analysis on the performance, costs, and benefits of a certain operation. For safety-related issues, cost-based calculations dominate practice, and typical measures include cost per injury or the total cost of accidents. Monetary information is needed to guide safety-related decision-making. Besides focusing on financial information, management accounting should also focus on non-financial information, such as safety improvement, strategic safety objectives and employee relations. In safety-related investments, the monetary costs of an investment are usually well known, but the monetary value of the benefits is hard to calculate. Thus, there is a need for cost-benefit evaluation methods, including the non-financial benefits and value created though preventing accidents. In addition to calculating the safety investment costs, the efficiency of the improvements, such as productivity improvements, quality and the value of safety goodwill, should be evaluated as well. The objective of this paper is to chart current management accounting practices related to safety issues on the basis of findings from relevant literature. Moreover, we discuss the applicability of certain management accounting methods for safety-related decision-making and how these can be used to improve current practices further. The relevant methods include the Balanced Scorecard approach, the payback period, the simple rate of return, and the benefit-to-cost ratio. They all offer means of calculating the cost and benefits of safety if the basic problems of uncertainty, valuation, perimeter of analysis, and quantification of costs and benefits are perceived. Valuing human life in cost-benefit analyses is also discussed.",
author = "Sari Tappura and Matti Siev{\"a}nen and Jouko Heikkil{\"a} and Ari Jussila and Noora Nenonen",
note = "Siirret{\"a}{\"a}n Portfolio15.<br/>Contribution: organisation=tta,FACT1=1<br/>Portfolio EDEND: 2015-01-08<br/>Publisher name: Elsevier BV",
year = "2015",
doi = "10.1016/j.ssci.2014.01.011",
language = "English",
volume = "71",
pages = "151--159",
journal = "Safety Science",
issn = "0925-7535",
publisher = "Elsevier",
number = "January",

}

RIS (suitable for import to EndNote) - Download

TY - JOUR

T1 - A management accounting perspective on safety

AU - Tappura, Sari

AU - Sievänen, Matti

AU - Heikkilä, Jouko

AU - Jussila, Ari

AU - Nenonen, Noora

N1 - Siirretään Portfolio15.<br/>Contribution: organisation=tta,FACT1=1<br/>Portfolio EDEND: 2015-01-08<br/>Publisher name: Elsevier BV

PY - 2015

Y1 - 2015

N2 - Management accounting supports decision making in organisations by providing managers with relevant information and analysis on the performance, costs, and benefits of a certain operation. For safety-related issues, cost-based calculations dominate practice, and typical measures include cost per injury or the total cost of accidents. Monetary information is needed to guide safety-related decision-making. Besides focusing on financial information, management accounting should also focus on non-financial information, such as safety improvement, strategic safety objectives and employee relations. In safety-related investments, the monetary costs of an investment are usually well known, but the monetary value of the benefits is hard to calculate. Thus, there is a need for cost-benefit evaluation methods, including the non-financial benefits and value created though preventing accidents. In addition to calculating the safety investment costs, the efficiency of the improvements, such as productivity improvements, quality and the value of safety goodwill, should be evaluated as well. The objective of this paper is to chart current management accounting practices related to safety issues on the basis of findings from relevant literature. Moreover, we discuss the applicability of certain management accounting methods for safety-related decision-making and how these can be used to improve current practices further. The relevant methods include the Balanced Scorecard approach, the payback period, the simple rate of return, and the benefit-to-cost ratio. They all offer means of calculating the cost and benefits of safety if the basic problems of uncertainty, valuation, perimeter of analysis, and quantification of costs and benefits are perceived. Valuing human life in cost-benefit analyses is also discussed.

AB - Management accounting supports decision making in organisations by providing managers with relevant information and analysis on the performance, costs, and benefits of a certain operation. For safety-related issues, cost-based calculations dominate practice, and typical measures include cost per injury or the total cost of accidents. Monetary information is needed to guide safety-related decision-making. Besides focusing on financial information, management accounting should also focus on non-financial information, such as safety improvement, strategic safety objectives and employee relations. In safety-related investments, the monetary costs of an investment are usually well known, but the monetary value of the benefits is hard to calculate. Thus, there is a need for cost-benefit evaluation methods, including the non-financial benefits and value created though preventing accidents. In addition to calculating the safety investment costs, the efficiency of the improvements, such as productivity improvements, quality and the value of safety goodwill, should be evaluated as well. The objective of this paper is to chart current management accounting practices related to safety issues on the basis of findings from relevant literature. Moreover, we discuss the applicability of certain management accounting methods for safety-related decision-making and how these can be used to improve current practices further. The relevant methods include the Balanced Scorecard approach, the payback period, the simple rate of return, and the benefit-to-cost ratio. They all offer means of calculating the cost and benefits of safety if the basic problems of uncertainty, valuation, perimeter of analysis, and quantification of costs and benefits are perceived. Valuing human life in cost-benefit analyses is also discussed.

U2 - 10.1016/j.ssci.2014.01.011

DO - 10.1016/j.ssci.2014.01.011

M3 - Article

VL - 71

SP - 151

EP - 159

JO - Safety Science

JF - Safety Science

SN - 0925-7535

IS - January

ER -