The Knowledge-Creating Company: How Japanese Companies Create the Dynamics of Innovation [Hardcover]

Why have Japanese companies become successful? This book offers a new explanation. It is argued that success of Japanese companies is not due to manufacturing prowess; access to cheap capital; close and cooperative relationships with customers, suppliers and government agencies; or lifetime employment and other human resources management practices - although all of these factors are important. Instead the claim is made that Japanese companies have been successful because of their skills and expertise at "organisational knowledge creation". This term is defined as the capability of the company as a whole to create new knowledge, disseminate it throughout the organisation, and embody it in products, services, and systems.

The book's case studies demonstrate that this is the golden key to the distinctive ways that Japanese companies innovate continuously, incrementally and spirally.

Rugby provides a metaphor for the speed and flexibility with which Japanese companies develop new products - as in rugby, the ball gets passed within the team as it moves up the field as a unit. The ball being passed around in the team contains a shared understanding of what the company stands for, where it is going, what kind of a world it wants to live in, and how to make that world a reality. Highly subjective insights, intuitions, and hunches are also embraced. That's what the ball contains - namely, ideals, values, and emotions.

Ball movement in rugby is borne out of the team members' interplay on the field. It is determined on the spot ("here and now"), based on direct experience and trial and error. It requires an intensive and laborious interaction among members of the team. This interactive process is analogous to how total knowledge is created organisationally.

This book calls for a fundamental shift in thinking about what the business organisation does with knowledge. Two kinds of human knowledge are distinguished. One is "explicit knowledge" which can be articulated in formal language including mathematical expressions and manuals. This kind of knowledge can be transmitted across individuals formally and easily. It has been the dominant mode of knowledge in the Western philosophical tradition. The Japanese company adds a second type of knowledge, "tacit knowledge" which is hard to articulate with formal language. This more personal form of knowledge is embedded in individual experience and involves intangible factors such as personal belief, perspective and the value system. In the West, tacit knowledge has been overlooked as a critical component of collective human behaviour. In contrast, tacit knowledge - and diffusion of learning from individual to team to organisation is a critical source of Japanese companies' competitiveness. Unless you understand this, Japanese management - and the way they win the business team game - will remain an enigma. Why not ready yourslef by discussing hidden knowledge-building agendas in our e-mail summit "Organising Creativity". It's free if you are passionately interested ..................................................................
Chris Macrae, editor of Brand Chartering Handbook & MELNET www.brad.ac.uk/branding/
E-mail me at wcbn007@easynet.co.uk

Small summary version of the Knowledge-Creating Company; 50 pages easy to read in 2 hours or less. Good if you are interested in KM and want to get a good view of key examples or insights from Nonaka's original book. The book is maybe lacking diagrams as 'a picture is worth 1000 words'. Written in big fonts on 10x15cm support, it would probably just fit on 10 pages if normally printed on an A4 format....

I spent one whole week reading the book when I was doing my full time MBA and I just loved this book. It's articulate, interesting (except first two chapters, esp the second chapter - sorry to say that), and inspiring. However, be careful when you read it, especially about what the authors' intention is, i.e. to theorise about their rather unique perspective on the CREATION of ORGANISATIONAL (not individual) KNOWLEDGE. As such, don't miss the Preface, in which authors explain their intention of writing this book (their belief) - 'There is nothing so practical as a good theory' (mentioned by Kurt Lewin). That's all I wanted to say, enjoy reading it. And...the whole week I spent finally paid off, I got 'A' grade in this assignment - it adds to my happy memory on those days!! Take care.