ACTIVITY BASED MANAGEMENT (ABM)
Financial Dictionary — Business & Management
Definition
converts Activity Based Costing (ABC) into a system to manage an organization. Activity Based Management not only focuses on product, service, customer, channel costing, it also emphasizes: cost drivers (root cause analysis), action plans to improve to achieve strategic objectives, and, performance measures for activities and processes.
Common Uses
- Used in planning, organizing, and controlling business operations.
- Used when setting KPIs, policies, procedures, and improving processes.
- Used when setting KPIs, policies, procedures, and improving processes.
Practical Example
- Example: Management applies **ACTIVITY BASED MANAGEMENT (ABM)** when designing policies and monitoring performance against targets.
Why This Term Matters
- Why it matters: Improves execution, accountability, and decision speed while reducing operational waste.