UOKMH. Wang

The Knowledge-Creating Company

How Japanese Companies Create the Dynamics of Innovation

* * *

November 28, 2011

Hanjun

UOKM

Table of Contents

Ch.No Title of content

1. Introduction to Knowledge in Organizations

2. Knowledge and Management

3. Theory of Organizational Knowledge Creation

4. Creating Knowledge in Practice

5. Middle-up-down Management Process for Knowledge Creation

6. A New Organizational Structure

7. Global Organizational Knowledge Creation

8. Managerial and Theoretical Implications

/ References

Hanjun

UOKMCh.1 Introduction to Knowledge in Organizations

Uncertainty → fear → changes → knowledge creation → continuous innovation → competitive advantage

The new focus on “knowledge” as a competitive resource

Three key characteristics of knowledge creation that relate to how tacit can be made explicit1) To express the inexpressible2) To disseminate knowledge among

individuals3) New knowledge is born in the

midst of ambiguity and redundancy

The distinctive Japanese approach to knowledge creation

Explicit/tacit knowledgeThe distinction is the key

Tacit knowledge → explicit knowledge → tacit knowledge → knowledge creation

The Honda City Example

Hanjun

UOKMCh.2 Knowledge and Management

Oneness of … From what kind of Japanese intellectual traditions

Humanity/Nature a unique view of time and space

Body/Mind the ultimate ideal condition that Zen practitioners seek

Self/Other the Japanese language

Western:What is Knowledge? Justified true belief. There are two traditions of Western epistemology:

• Empiricism: Aristotle, Locke, etc.

• Rationalism: Plato, Descartes, etc.

Synthesize the two: Kant, Hegel, Marx, etc.

mutually complemen-

tary

Hanjun

UOKMCh.3 Theory of Organizational Knowledge Creation

Organization’s innovation: an outside-in and inside-out processThe key to knowledge creation: tacit knowledgeThe engine of the knowledge creation process: four modes of knowledge conversion

Organizational knowledge creation

(Socialization)SympathizedKnowledge

(Externalization)ConceptualKnowledge

(Combination)SystemicKnowledge

(Internalization)OperationalKnowledge

Tacit

knowledge

Explicit

knowledge

from

Tacit knowledge Explicit knowledgeto

5 conditions

5-pased model

Hanjun

UOKM

Ch.4 Creating Knowledge in Practice

Matsushita Electric

Hanjun

UOKM

Top-down model:pyramid / top managers / combination / internalizationBottom-up model:flat & horizontal / front-line employees / socialization / externalizationLimitation: ignoring middle managers

Ch.5 Middle-up-down Management Process for Knowledge Creation

Middle-up-down managementKnowledge is created by middle managers, who are the key to continuous innovationMain job of middle managers: orient chaos toward knowledge creationAdvantages: who/what/where/how

Knowledge Creating Crew

•Practitioners•Engineers•Officers

Hanjun

UOKMCh.6 A New Organizational Structure

To create K. efficiently and continuously, which should has oscillated between two basic types: bureaucracy and task force.

Attempt case: U.S. military (bureaucracy + task force) and Japanese army & navy (bureaucracy) in WWII

“Hypertext”

Advantages:• bureaucracy + task force• Knowledge base: the

“clearinghouse” Key characteristics of a

hypertext organization: the ability of its members to shift contexts, moving easily in and out of one context into another

Failed to “unlearn” past success factors

Hanjun

UOKM

Ch.7 Global Organizational Knowledge Creation

The interaction between tacit and explicit knowledge: individual VS group

Emphasis on: explicit VS tacit

Certainty VS ambiguity

Differences between the Japanese and Western approaches

“knowledge specialists”

Hanjun

UOKMCh.8 Managerial and Theoretical Implications

1. Create a knowledge vision2. Develop a knowledge crew3. Build a high-density field of

interaction at the front line4. Piggyback on the new-product

development process

5. Adopt middle-up-down management6. Switch to a hypertext organization7. Construct a knowledge network with

the outside world

7 guidelines (organizationally)

7 dichotomies (theoretically)

1. Tacit/explicit2. Body/mind3. Individual/

organization4. Top-down/bottom-

up

5. Bureaucracy/task force

6. Relay/rugby7. East/west

Hanjun

UOKM

References

• A review and critique of Nonaka and Takeuchi’s theory of organizational knowledge creation http://mcleanglobal.com/public/MGC/publications/Nonaka%20and%20Takeuchi.pdf

• Nonaka SECI model http://editthis.info/jsarmi/Nonaka_SECI_Model • Nonaka’s knowledge model

http://www.youtube.com/watch?v=p_FcJaknptY • Nonaka & Takeuchi - Seci, Ba & Knowledge Assets

http://paei.wikidot.com/nonaka-takeuchi-seci-ba-and-knowledge-assets

• A graphic depiction of Nonaka’s & Takeuchi’s theory on knowledge creation http://usineaprojet.wikispaces.com/file/view/km_beckwith.pdf

• The Big Idea: The Wise Leader• http://hbr.org/2011/05/the-big-idea-the-wise-leader/ar/1 • Wise leadership http://www.youtube.com/watch?v=Rp-cjRhWoV0 • Knowledge management in times of social media

http://www.youtube.com/watch?v=qnfYzKiW50Q

Hanjun

UOKM

Thank you!

Hanjun WangNov.28,2011