Knowledge management: a strategic cost management perspective

Abstract

Organizational knowledge is receiving increasing attention in the management literature because ofits claimed capability to create a competitive advantage. In recent years, notable research effortshave been addressed to strategic, organizational, technological, financial and management reportingissues linked to the knowledge role in organizations.This paper focuses its attention to the way knowledge affects firms cost structure. Most specifically,by using recent research development in the field of strategic cost management, the paperinvestigates the activities related to organizational knowledge, their cost and cost drivers, and theirimpact on firm’s profit potential with the aim to provide information for effective strategic decisionmaking and control. After a brief literature review of knowledge management theories andapplications, research model and methodology will be elicited. Then the model will be applied tofour Italian companies operating in the mechanical industry. While this paper is a work in progress,evidence shows that strategic cost management framework might represent a valuable source forunderstanding and managing the critical aspects related with knowledge management andmeasurement (specifically what a firm knows or should know, which activities should a firmperform in order to capture, develop or leverage its knowledge). In the conclusive part theoreticaland methodological issues will be reported as well as future research efforts.