THE STREAMS OF RESEARCH that examine business outcomes and SH&E outcomes should overlap, but they do not. During the past 20 years, the need to make a business case for confronting and managing SH&E issues and practices has grown (Henn, 1993; Cohan & Gess, 1994; Warren & Weitz, 1994; Cobas, Hendrickson, Lave, et al., 1995; Brouwers & Stevels, 1995; Mizuki, Sandborn & Pitts, 1996; Lashbrook, O'Hara, Dance, et al., 1997; Hart, Hunt, Lidgate, et al., 1998; Timmons, 1999; Nagel, 2000; Warburg, 2001; Adams, 2002; Veltri, Pagell, Behm, et al., 2007). To date, however, the economics of those issues and practices is one of the least-understood subjects (Tipnis, 1994; Asche & Aven, 2004) and little has been done to create economic analysis models that systematically link SH&E issues and practices with business outcomes (Epstein & Roy, 2003). SH&E tends to tie its outcomes to the overall culture of the organization (e.g., managerial commitment to programs and practices) (Zohar, 1980, 2002; Hofman & Stetzer, 1996; Oliver, Cheyne, Tomas, et al., 2002), but not to business outcomes (Behm, Veltri & Kleinsorge, 2004). In this patchwork of research activity, the authors believe that many business questions are left unanswered such as:

  • Which products, technologies, processes and services tend to drive SH&E life cycle cost?

  • Which SH&E management strategies and technical tactics should be pursued and what level of investment will be required?

  • What is the potential business contribution over the long and short term?

As a result, a firm's investment allocation decision makers cannot make fully informed business and operational decisions when it comes to investing money in confronting and managing SH&E issues and practices. The concern for making a business case for SH&E has resonated in the safety community for some time (Jervis & Collins, 2001; Smallman & John, 2001) and the economic value of SH&E practices has been addressed by many researchers (Behm, et al., 2004; Calow, 1998; Jones-Lee, 1989; Fischoff, Lichtenstein, Slovic, et al., 1981). Despite the importance of enhancing ways to present the economic soundness of SH&E, firms lack SH&E financial modeling tools to guide their decision making and operating action capabilities (Surma & Vondra, 1992). Several noteworthy conclusions can be gleaned from the literature review; these provide the current level of understanding concerning ways to make the business case for SH&E investments (Veltri, Dance & Nave, 2003a, b).

  1. Private-sector companies are less effective than they would like to be in presenting the economic soundness of SH&E investments and in using the information to maintain a balance between externally driven SH&E and internally driven competing business performance. Organizations must understand the cost burdens associated with new, existing and upgraded products, technologies and processes, yet such understanding is rare. The information supporting such decision making should come from design and process engineers who are in a strategic position to supply this essential data. However, if design and process engineers are not provided tools that enable them to profile SH&E costs and profitability potential, they cannot contribute effectively to decision making.

  2. Critical business decisions are incomplete when SH&E costs and profitability potential are not disclosed throughout the life cycle of products, technologies and processes.

This content is only available via PDF.
You can access this article if you purchase or spend a download.