How has Japan become a major economic power, a world leader in the automotive and electronics industries? What is the secret of their success? The consensus has been that, though the Japanese are not particularly innovative, they are exceptionally skilful at imitation, at improving products that already exist. But now two leading Japanese business experts, Ikujiro Nonaka and Hiro Takeuchi, turn this conventional wisdom on its head: Japanese firms are successful, they contend, precisely because they are innovative, because they create new knowledge and use it to produce successful products and technologies. Examining case studies drawn from such firms as Honda, Canon, Matsushita, NEC, 3M, GE, and the U.S. Marines, this book reveals how Japanese companies translate tacit to explicit knowledge and use it to produce new processes, products, and services.

The knowledge-creating company : how Japanese companies create the dynamics of innovation

The East Asian miracle: Economic growth and public policy: By the World Bank. (New York: Oxford University Press for the World Bank, 1993. 389 pp. $19.95, paper.)

What makes organizations so similar? We contend that the engine of rationalization and bureaucratization has moved from the competitive marketplace to the state and the professions. Once a set of organizations emerges as a field, a paradox arises: rational actors make their organizations increasingly similar as they try to change them. We describe three isomorphic processes-coercive, mimetic, and normative—leading to this outcome. We then specify hypotheses about the impact of resource centralization and dependency, goal ambiguity and technical uncertainty, and professionalization and structuration on isomorphic change. Finally, we suggest implications for theories of organizations and social change.

The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields (Chinese Translation)

We discuss and explore the effects of internationalization, an entrepreneurial strategy employed by small and medium-sized enterprises (SMEs), on firm performance. Using concepts derived from the international business and entrepreneurship literatures, we develop four hypotheses that relate the extent of foreign direct investment (FDI) and exporting activity, and the relative use of alliances, to the corporate performance of internationalizing SMEs. Using a sample of 164 Japanese SMEs to test these hypotheses, we find that the positive impact of internationalization on performance extends primarily from the extent of a firm's FDI activity. We also find evidence consistent with the perspective that firms face a liability of foreignness. When firms first begin FDI activity, profitability declines, but greater levels of FDI are associated with higher performance. Exporting moderates the relationship FDI has with performance, as pursuing a strategy of high exporting concurrent with high FDI is less profitable than one that involves lower levels of exports when FDI levels are high. Finally, we find that alliances with partners with local knowledge can be an effective strategy to overcome the deficiencies SMEs face in resources and capabilities, when they expand into international markets. Copyright © 2001 John Wiley & Sons, Ltd.

The internationalization and performance of SMEs

In this concluding article to the Management Science special issue on "Managing Knowledge in Organizations: Creating, Retaining, and Transferring Knowledge," we provide an integrative framework for organizing the literature on knowledge management. The framework has two dimensions. The knowledge management outcomes of knowledge creation, retention, and transfer are represented along one dimension. Properties of the context within which knowledge management occurs are represented on the other dimension. These properties, which affect knowledge management outcomes, can be organized according to whether they are properties of a unit (e.g., individual, group, organization) involved in knowledge management, properties of relationships between units or properties of the knowledge itself. The framework is used to identify where research findings about knowledge management converge and where gaps in our understanding exist. The article discusses mechanisms of knowledge management and how those mechanisms affect a unit's ability to create, retain and transfer knowledge. Emerging themes in the literature on knowledge management are identified. Directions for future research are suggested.

Managing Knowledge in Organizations: An Integrative Framework and Review of Emerging Themes

To investigate the conditions under which learning-by-hiring (or the acquisition of knowledge through the hiring of experts from other firms) is more likely, we study the patenting activities of engineers who moved from United States (U.S.) firms to non-U.S. firms. Statistical findings from negative binomial regressions show that mobility is more likely to result in interfirm knowledge transfer when (1) the hiring firm is less path dependent, (2) the hired engineers possess technological expertise distant from that of the hiring firm, and (3) the hired engineers work in noncore technological areas in their new firm. In addition, the results support the idea that domestic mobility and international mobility are similarly conducive to learning-by-hiring. Thus, our paper suggests that learning-by-hiring can be useful when hired engineers are used for exploring technologically distant knowledge (rather than for reinforcing existing firm expertise) and also for extending the hiring firm's geographic reach.

Learning-by-Hiring: When Is Mobility More Likely to Facilitate Interfirm Knowledge Transfer?

Learning-by-Hiring: When Is Mobility More Likely to Facilitate Interfirm Knowledge Transfer?: When Is Mobility More Likely to Facilitate Interfirm Knowledge Transfer?

Are multinational corporations (MNCs) superior to strategic alliances and markets in facilitating the flow of knowledge across borders? If so, what are the sources of this superiority? Despite their central importance to the theory and practice of international management, these questions have not been directly tested. Our paper seeks to address this gap in empirical research.Drawing upon recent research on multinational corporations and the knowledge-based view of the firm, we develop hypotheses regarding the relative superiority of alternative institutional arrangements as regards cross-border knowledge building. Analysis of patent citations by semiconductor companies points to the superiority of multinational firms over both alliances and markets in cross-border knowledge building. Interviews with engineers and managers in MNCs point to the intertwining of codified and tacit knowledge and; therefore, the need for both formal and informal mechanisms for successful knowledge building. Our findings suggest that the superiority of MNCs stems from the firms' ability to use multiple mechanisms of knowledge transfer flexibly and simultaneously to move, integrate, and develop technical knowledge. Our research, therefore, suggests that the challenge of knowledge management for MNCs extends beyond the creation of international information systems, to the design of organizational structures, systems, and culture capable of supporting the flow of knowledge.

https://www.jstor.org/stable/pdfplus/3085990.pdf

Are Firms Superior to Alliances and Markets? An Empirical Test of Cross-Border Knowledge Building

This paper investigates the proposition that foreign direct investment in a high-technology industry is motivated in part by the sourcing of country-specific technological advantages embedded in foreign firms. The empirical findings show that foreign equity investment is drawn to American biotechnology firms with high levels of patent activity. We suggest that, in the biotechnology industry, foreign direct investment in the form of equity participation can be an efficient vehicle for tapping into country-specific, firm-embodied technological advantages.

https://link.springer.com/content/pdf/10.1057%2Fpalgrave.jibs.8490101.pdf

Jaeyong Song

Papers

Learning-by-Hiring: When Is Mobility More Likely to Facilitate Interfirm Knowledge Transfer?

Learning-by-Hiring: When Is Mobility More Likely to Facilitate Interfirm Knowledge Transfer?: When Is Mobility More Likely to Facilitate Interfirm Knowledge Transfer?

Are Firms Superior to Alliances and Markets? An Empirical Test of Cross-Border Knowledge Building

Foreign Direct Investment and the Sourcing of Technological Advantage: Evidence from the Biotechnology Industry

A Resource-based View of Strategic Alliances and Firm Value in the Electronic Marketplace