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 success 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 transform 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 U.S. Marines. For instance, using Matsushita's development of the Home Bakery (the world's first fully automated bread-baking 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 herself withthe master baker at Osaka International Hotel, gained a tacit 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 21st 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 changes 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 knowledge continuously, and how to exploit it to make successful new products, services, and systems.

The knowledge-creating company

Open Innovation: The New Imperative for Creating and Profiting from Technology

The authors seek to understand which of three different strategic orientations of the firm (customer, competitive, and technological) is more appropriate, when, and why it is so in the context of d...

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Strategic orientation of the firm and new product performance

PDMA Research on New Product Development Practices: Updating Trends and Benchmarking Best Practices

The ability to generate and market creative ideas in new products (NPs) and related marketing programs (MPs) in response to changing market needs is key to the success of a firm. This research examines the mediating role of NP and MP creativity between market orientation and NP success. The authors investigate (1) whether market orientation facilitates or inhibits creativity, (2) whether creativity influences NP performance, and (3) how to define and measure creativity in the NP development and launch contexts. They use a two-stage sampling frame to collect 312 sets of responses from managers and NP team leaders and thereby address the potential for common method bias in measures of creativity and NP performance. The findings indicate that NP and MP creativity mediates the relationship between market orientation and NP success. The authors also show that the meaningfulness dimension, rather than the novelty dimension, of creativity is of greater importance in explaining the link between market or...

Market orientation, creativity, and new product performance in high-technology firms

Provides a review and ready reference to recent writings on new service development (NSD), especially for the financial services sector. Discusses the types of new service development, the purposes served by them and the processes. Refers to the key activities of NSD and measures its success. An annotated bibliography supplies a very useful guide to the new service development literature.

New service development: a review of the literature and annotated bibliography

What distinguishes the top performing new products in financial services

Success Factors for Service Innovation: A Meta-Analysis

Contributes to the growing body of information on the determinants of performance in new products. Examines a sample of “typical” new products (instead of the more usual comparison of successes and failures) and identifies the factors that are crucial for producing outstanding performance in the financial services sector. Shows that marketing factors (i.e. effective distribution and effective communications) are the keys to new service success. In addition demonstrates the importance of the quality of the service offered and the quality of the tangible evidence of the service as a basis of outstanding performance. These key determinants of performance need to be built on the skills of the frontline staff and the push they give to the new product. Reiterates the importance of synergy when developing new products. Product advantage is not the key success factor, contrary to previous findings in other sectors. Attributes this to the nature of the sector studied (financial services) where sustainable competitive product advantage is rarely achieved. Makes a comparison between success factors for consumer services and industrial products/services.

Chris Storey

Papers

New service development: a review of the literature and annotated bibliography

What distinguishes the top performing new products in financial services

Success Factors for Service Innovation: A Meta-Analysis

Determinants of new product performance: A study in the financial services sector

The Augmented Service Offering: A Conceptualization and Study of Its Impact on New Service Success