Definition: is a management style that is aimed at maximizing and improving business activities that add value to the company, while minimizing or removing the non-value adding activities. The primary goal of ABM is to enhance the efficiency of a business by securing and protecting its markets. This management style heavily relies on activity based costing as the leading information source and focuses on: a) cost reduction, b) creation of various performance measures, c) improvement of a company’s cash flow, and d) production of increased value goods.
In a Sentence:
Thanks to the integration of the activity based management system, Genesis EIL managed to generate more accurate budgets. They used ABM to gather and analyze cost information about all their operational areas.
Ever since we’ve adopted the activity based management style, we witnessed a fourteen percent profits increase. We removed the non-value adding activities and used the freed up resources to strengthen our core activities.
Synonyms and related words: management style, quality of life management, management by exception, business performance management