The knowledge Creating Company

THE KNOWLEDGE CREATING COMPANY
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(30September 2010)
The knowledge Creating Company
Main thesis or argument of the article
Nonaka, & Takeuchi, 1995 in the book the knowledge-creating company contributes to the idea of knowledge and the role it plays in business organizations. He tries to explain the long term strategy that a company can use in order to stay in business even when the business is faced by market shifts, proliferation of technology, intense competition, and obsolete products among other challenges (Collins, 2001). He tries to bring out the importance of knowledge to a company and how to use it to remain at a competitive advantage.
The traditional systems of western management that view an organization as a mechanism of processing information and the ideas that knowledge can only be useful if it is formal and systematic are challenged by the article. The traditional views of evaluating the value for knowledge as similar which are hard and quantifiable i.e. increased efficiency, improved return on investments, and lower costs is also challenged by introducing a different view of knowledge and its uses to make a business successful.
The paper gives clear examples of successful competitive companies found in Japan i.e. Honda, Canon, Sharp, NEC, Kao, and Matsushita and their ability to use knowledge in their quest to satisfy customers, developing new products rapidly, and introducing dominant new technologies. Their success is pegged on the distinctive approach in managing creation of new knowledge. This is explained by the use of the spiral of knowledge which explains the integration of the tacit and explicit to bring about success. The authors use socialization, externalization, combination, and internalization (SECI) as the means to organizational success that explains knowledge source and creation (Nonaka, & Takeuchi, 1995).
This Japanese approach has time and again been criticized by western managers who regard it as odd and incomprehensible. Despite this criticism harnessing knowledge of the company can create long term growth and thus the company remains afloat despite of any turmoil’s that may appear.
Why did the authors write the paper?
The paper is written for one basic purpose, it intends to challenge the western concepts of uses of knowledge in managing a business and introduce more dynamic approaches in which knowledge can be utilized to ensure the business remains competitive and profitable at all times. The author gives a long term solution to competition that enables a company utilize knowledge to have a competitive advantage. He compares Japanese companies that have adopted this system and have become leaders in their industry (Marescaux, 1997).
The author gives an example of the slogan “Theory of Automobile Evolution” Nonaka, & Takeuchi, 1995 leads to a design concept that is meaningful and thus steering Honda to produce an urban car which was innovative by all means. Another example was how a beer can concept became a useful idea to a personal copier. This concept led to the development of a Canon’s revolutionary mini-copier that made Canon move from its stagnated business of cameras to a more innovative and productive industry of field automation. Sharp has also used “optoelectronics” to create a reputation that assures customers that it is the best producer of innovative quality products in the technology industry.
This concept however has been termed by the western manager as silly, but to the Japanese companies they have been a concept of quality advertisement and as knowledge to steer the company to greater heights through innovation. This concept is the clear purpose of this paper and Nanaka, explains it clearly by using the “spiral of knowledge” (Nonaka, & Takeuchi, 1995).
Nonaka, 1991 brings the concept that knowledge originates from chaos i.e. knowledge creation is based on the company’s human resource approach; the employees are invoked to think to challenge a vague business metaphor, the business managers thus must come up with a vague metaphor that incorporates the motto of the business so that the employees are able to think. The motto is introduced because it means different people to different employees because of their functional context; this induces debates and brainstorming that brings about creativity (Patriotta, 2004). This to the author then leads to effective transfer of the knowledge to the business prospects. Creating knowledge in this context means that a transfer of tacit into explicit knowledge occurs and this tacit knowledge is utilized in the innovation process.
Nonaka, state that “Making personal knowledge available to others is the central activity of the knowledge-creating company” Nonaka, & Takeuchi, 1995 thus he proposes the use of analogies whenever metaphors seem to be confusing, this will enhance the creative knowledge passed on and harnessed by the business. This ensures that expl...