Skip to main content

Research Repository

Advanced Search

Releasing Hidden Profit through Taking a Strategic View of Non-strategic Costs

Yeh, Yi-Cheng


Yi-Cheng Yeh


With the emergence of the lean enterprise and increased global competition, companies should learn to be more proactive in the way they manage costs from a strategic perspective. The literature has shown that cost management has shifted away from a focus on the clerkship role, product costing and financial reporting. The new focus is on a strategic supporting role to facilitate the management of the firm and the achievement of its strategic goals. By focusing on reducing costs as in lean philosophy much can be done to reduce costs from a strategic point of view. The new emphasis considers strategic issues called strategic cost management and promotes the management of costs in a strategic way. Extending the idea of strategic cost management, the focus of interest is in high level organisation strategy and the attempt to categorise costs into two blocks from a strategic perspective—strategic costs and non-strategic costs, and further to develop a conceptual framework to release hidden profit through by a strategic view of non- strategic costs.

The few articles and studies that have been published in the last couple of years have used a strategic approach to managing overhead resources and costs, and no studies have focused on the management of non-strategic costs. The subject is investigated by taking a positive approach to surveying and interviewing (to achieve triangulation) business stakeholders and entrepreneurs, mainly based in Taiwan. From this, the framework ‘Extended Strategic Cost Management (ESCM)’ as the research contribution to the professional practice is developed which as a case study was implemented in a hospital in Taiwan. This framework exposed issues, such as the need for management commitment, the implementation of the need to categorise costs into two blocks of strategic and non-strategic costs and focus on non-strategic costs. The idea of focusing on non-strategic costs originated from practitioners. It is argued in the research that companies can attain a competitive position by managing non-strategic costs. In addition, the importance of the study is to provide academic support for defining the terms of strategic and non-strategic costs, recognise the profit contribution and the value of administrative personnel, and fill the gap in the literature of strategic cost management.

Thesis Type Thesis
Deposit Date Oct 21, 2014
Peer Reviewed Not Peer Reviewed
Keywords Cost management; global competition; strategic management; lean enterprise;
Public URL
Contract Date Oct 21, 2014
Award Date 2014-05


Downloadable Citations