The activation of knowledge management (KM) processes in manufacturing firms: use of target costing and information technology (IT) infrastructure

This study empirically examined the effects of both target costing systems (TCS) and information technology (IT) infrastructure on the knowledge management (KM) processes of manufacturing firms. A multi-methodological approach was adopted by mixing both qualitative and quantitative methods. Before empirical investigation, through a case study of the H Motor Company in Korea, this paper aimed to demonstrate the functions of TCS in the management of tacit knowledge. The case study indicated that with the use of TCS, diverse kinds of knowledge can be created, transferred, and shared among members of an organization for achieving the goals of a manufacturing firm. According to the empirical results, it was found that TCS, which usually support the realization of a personalization strategy, have a significant and positive impact on all four KM processes: socialization, externalization, combination and internalization. It was also observed that IT infrastructure only positively influences the combination and internalization, which are the processes of communicating and collecting explicit knowledge. Thus, it is concluded that TCS are not simply tools of cost reduction but the KM systems that facilitate the creation and application of various kinds of knowledge.   Key words: Personalization, codification, knowledge management processes, target costing systems, information technology (IT) infrastructure.

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