The Knowledge Creating Company

Knowledge is crucial in maintaining competitive advantage because it drives innovation. Ikujiro Nonaka explored this in detail in his article The Knowledge-Creating Company, wherein he compared how Japanese companies are distinguished from their Western counterparts in the way they treat knowledge and how it is viewed, adopted and encouraged among Japanese business organization. The traditional Western perspective, according to the author, is that knowledge is treated as a mere resource and is measured and used according to a systematic and quantified metrics characterized by hard data, codified procedures and universal principles (1). While this approach to knowledge may be effective, it supposedly pales in comparison with the Japanese model especially in addressing the highly dynamic market behavior. Nonaka explained that the Japanese model focuses on the cycle of translating tacit knowledge to expressed knowledge and back again, driving a culture of innovation in the process. Central to this strategy is the cultivation of an environment that fosters the creation of knowledge. For instance, Japanese managers give attention to its employees as much as the customers and the company

itself. What this means is that employees acquire a certain degree of belongingness that they feel committed, identified and loyal to their organization. Here, an organizations objectives are also the employees own that is why it is not difficult for them to work and to find better ways and ideas in doing things. When Honda, for example, used the slogan Theory of Automobile Evolution, the concept immediately caught on. Westerners find themselves in confused about the ambiguity of this slogan, much more about its significance and efficacy as a guiding framework and this is because they do not have the mindset of the Japanese worker and Japanese management. The dynamics of the workplace and the characteristics of the people within it made it possible for such slogan to be effective in achieving innovation in the development of Honda City. Another important element of the Japanese perspective on knowledge is how an organization is treated as a living organism. It is not merely a separate legal entity or merely a machine for production wherein people are divided into parts that play specific roles but considered as sentient due to the collective sense of identity and fundamental purpose. According to Nonaka, this makes the area of research, product development, marketing and planning not exclusively

the domain of research and development or marketing departments. Rather, each employee contributes something and is a working and functional knowledge worker. The above points were supported by several principles and Nonaka attempted to be as comprehensive as possible, outlining many very important ones. For instance, he cited the idea that innovation would always come from an individual a manager who has the skill to keep up with the fickleness of the market, a researcher who has the knowledge to develop effective strategies, or a cleaner who may have a brilliant idea about effective processes based on his work experiences. So each employee in an organization, regardless of his or her position is considered a source of excellent ideas. Another principle offered was how both expressed knowledge and tacit knowledge are utilized in order to achieve objectives. Expressed knowledge is easy to tap, exploit and disseminate. Tacit knowledge, however, is another story. Nonaka wrote that it is highly personal and that it is hard to formalize and, therefore, difficult to communicate to others (3). The Japanese companies became experts in combining these two sources of knowledge. Their perspective on knowledge, which led to effective frameworks, has made this possible.

The author called it as spiral of knowledge, wherein tacit and expressed knowledge are used in cyclical processes that lead to faster and more effective idea-generation. An important variable in this regard is the personal commitment of employees. Without it, the interplay of expressed and tacit knowledge will not yield the desired result. Several cases were cited to further explain the Japanese experience. The Honda City product development process and Sharps optoelectronics battle cry were, for instance, discussed further in detail (4-6). These cases underscored how unique strategies such as the penchant of Japanese organizations to use metaphors in their product development or how chaos are tapped as an opportunity for innovation, demonstrate how tacit knowledge can be effectively expressed. Through Nanokos explanations, it is easy to understand that what makes the Japanese companies approach to knowledge distinct and superior to conventional Western models is its ability to tap both expressed and tacit knowledge in their drive for innovation. Their experiences show a more involved way of doing things because they successfully created a kind of culture in the workplace wherein a worker is not merely an employee or the organization is not just a machine.

Work Cited Nonaka, Ikujiro. The Knowledge-Creating Company. Harvard Business Review JulyAugust 2007: 1-11.