What does Activity Based Management focus on?

Activity Based Management (ABM) centers on evaluating activities in terms of their costs and the value they provide to the organization. This approach allows businesses to scrutinize various activities to identify which processes are adding value and which may be unnecessary or inefficient, ultimately leading to more informed decision-making.

By focusing on the relationship between activities, costs, and value creation, ABM helps organizations optimize resource allocation, enhance operational efficiency, and improve profitability. This enables managers to prioritize initiatives that contribute positively to the bottom line and to refine or eliminate activities that do not yield sufficient returns.

The other options do not encapsulate the essence of ABM, as employee satisfaction, while important, is not its primary focus, and creating more complex management strategies or simplifying management roles does not directly relate to the cost and value evaluation that is central to Activity Based Management.