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Korean Academic Society of Business Administration
[ Article ]
korean management review - Vol. 52, No. 3, pp.573-594
ISSN: 1226-1874 (Print)
Print publication date 30 Jun 2023
Received 17 Mar 2023 Accepted 10 Apr 2023
DOI: https://doi.org/10.17287/kmr.2023.52.3.573

An Investigation of Zero Waste Management Based on Perceived Consumer Effectiveness

Mikeum Kim ; Byung Cho Kim
(First Author) Dongguk University mikeumkim01@gmail.com
(Corresponding Author) Korea University bkim@korea.ac.kr
지각된 소비자 효율에 따른 제로웨이스트 경영의 실행 가능성


Copyright 2011 THE KOREAN ACADEMIC SOCIETY OF BUSINESS ADMINISTRATION
This is an open access article distributed under the terms of the Creative Commons Attribution License 4.0, which permits unrestricted, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

This study examines viability of zero waste manufacturing model in which manufacturing firms recycle parts and reuse materials to make a new product. Grounded on an economic model, we identify the conditions under which the monopolistic firm's zero waste action brings profit. We examine the profitability of the versioning strategy in the presence of two consumer types, including primary and eco-conscious consumers. The eco-conscious consumers are specified by a perceived consumer effectiveness that explains the consumers’ consideration and inclination to solve the prevalent societal problem. We find that offering single version is dominant over offering both versions under certain conditions, even though we also verify that the preeminence of versioning is usually applicable. We further analyze the impact of subsidies for the zero waste on firm’s profit and the social welfare. We find subsidies do not always benefit the manufacturer; if the subsidy does not exceed a certain level, it does not increase social welfare. We show that the high subsidy does not guarantee increasing social welfare when the market structure is known. Contrary to the manufacturer profit, social welfare can increase with lower subsidy level.

Keywords:

Zero waste, eco-friendly consumer, versioning, subsidy, corporate social responsibility (CSR)

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∙ The author Mikeum Kim is a Lecturer of Business Administration at Dongguk University and Hongik University. She received her Ph.D. in Logistics, Services, and Operations Management from Korea University Business School. Her research interests include eco-friendly manufacturing, patent, e-commerce, new technology timing strategy.

∙ The author Byung Cho Kim is a Professor of Logistics, Service, and Operations Management at Korea University Business School. Before joining Korea University, he served as an Assistant Professor of Business Information Technology at the Pamplin College of Business at Virginia Tech. He received his M.S. in Statistics from the University of Chicago and Ph.D. from Tepper School of Business at Carnegie Mellon University. His primary research interests include digital transformation, technology management and e-business operations.