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How have Japanese companies become world
leaders in the automotive and electronics industries, among
others? What is the secret of their success? Two leading
Japanese business experts, Ikujiro Nonaka and Hirotaka Takeuchi,
are the first to tie the performance of Japanese companies
to their ability to create new knowledge and use it to produce
successful products and technologies. In The Knowledge-Creating
Company, Nonaka and Takeuchi provide an inside look
at how Japanese companies go about creating this new knowledge
organizationally.
The authors point out that there are two
types of knowledge: explicit knowledge, contained in manuals
and procedures, and tacit knowledge, learned only by experience,
and communicated only indirectly, through metaphor and analogy.
U.S. managers focus on explicit knowledge; the Japanese,
on the other hand, focus on tacit knowledge. And this, the
authors argue, is the key to their success -- the Japanese
have learned how to convert tacit into explicit knowledge.
To explain how this is done -- and illuminate
Japanese business practices as they do so -- the authors
range from Greek philosophy to Zen Buddhism, from classical
economists to modern management gurus, illustrating the
theory of organizational knowledge creation with case studies
drawn from such firms as Honda, Canon, Matsushita, NEC,
Nissan, 3M, GE, and even the US Marines. For instance, using
Matsushita's development of Home Bakery (the world's first
fully automated bread-making machine for home use), they
show how tacit knowledge can be converted to explicit knowledge:
when the designers couldn't perfect the dough kneading mechanism,
a software programmer apprenticed himself with the master
baker at Osaka International Hotel, gained an understanding
of kneading, and then conveyed this information to the engineers.
In addition, the authors show that, to create knowledge,
the best management style is neither top-down nor bottom-up,
but rather what they call "middle-up-down," in
which the middle managers form a bridge between the ideals
of top management and the chaotic realities of the frontline.
As we make the turn into the twenty-first
century, a new society is emerging. Peter Drucker calls
it the "knowledge society," one that is drastically
different from the "industrial society," and one
in which acquiring and applying knowledge
will become key competitive factors. Nonaka and Takeuchi
go a step further, arguing that creating knowledge will
become the key to sustaining a competitive advantage in
the future.
Because the competitive environment and
customer preferences change constantly, knowledge perishes
quickly. With The Knowledge-Creating Company, managers
have at their fingertips years of insight from Japanese
firms that reveal how to create new knowledge organizationally,
and how to exploit it to make successful products, services,
and systems.
Ikujiro Nonaka and Hirotaka Takeuchi
are both professors at Hitotsubashi University.
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