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

Doing Qualitative Research

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

House of Quality

The Organization of Learning そして

Empirical analysis of evolution of product architecture: Fanuc numerical controllers from 1962 to 1997

This paper presents a theoretical framework under which large companies should be able to bring about strategy transformation. First, we present the concept of ‘strategic innovation capability’, a corporate system capability to achieve corporate strategy transformation by strategic innovation. Then, we consider strategic innovation capability by comparing it with previous theories (dynamic capability, major innovation, dynamic capability, breakthrough innovation capability). Second, we present the case example of strategy transformation at Fanuc, a company that holds the top global share in the numerical control (NC) market. In this case study research, we consider and analyze historically how the company aimed for new creativity in the NC market, developed innovative NC technology for the machine tool market, and used that technology energetically for commercialized products. From the strategic innovation capability framework, the core theory of this paper, we also analyze and consider how top management made conscious efforts to form a new development organization within the company, and the processes involved in achieving strategy transformation to establish competitive superiority in this field. Finally, we discuss the implications drawn from this case analysis, and the issues for future research.

https://papers.ssrn.com/sol3/Delivery.cfm/RADM_RADM12041.pdf?abstractid=2372194&mirid=4

Strategy transformation through strategic innovation capability – a case study of Fanuc

In a last few decades, innovation research scholars proposed several new concepts, one after another, but independently, and in a chronological sequence: technology fusion; digital convergence; disruptive technology; open innovation; and IoT (Internet of Things). Each concept has its own explaining power for a certain innovation at a certain time period, but has obvious limitations. A basic question is, therefore, whether each of those proposed concepts is independent among them or inter-related dynamically, i.e. in what sequences? In order to answer this question, a specific industrial product, i.e. machine tools, is selected for our study. Although the machine tool is described as the mother machine, i.e. the machine of all the machinery, this industry experienced a drastic technological shift toward NC (numerically controlled) revolution around 1975. However, up until now, this industry continues to be a pivotal industry in modern and high-tech industrial era. By reviewing the technological history of the Japanese machine tool industry from 1975 to 2015, we observed several technological shifts even after the NC revolution, each of which can be explained with one of those concepts proposed in the last decades. We find a dynamic interrelationship among those concepts in the following sequence with the publication dates in parenthesis: disruptive technology (1997), technology fusion (1992), open innovation (2003), digital convergence (1996). We describe characteristics and analytical framework for IoT innovation that has gone beyond the traditional Schumpeterian formulation of innovation.

https://www.mdpi.com/2199-8531/3/4/23/pdf

Beyond fusion towards IoT by way of open innovation: an investigation based on the Japanese machine tool industry 1975-2015

The modularity of products is progressing in many industries. This paper uses a case study to analyze the process of integrating personal computer (PC) and numerical control (NC) machine tools, and conceptualizes as module dynamics the product innovation that works in modular products. Module dynamics refers to the process of product innovation that occur in highest-order modules of modular products and that is achieved through a two-stage process of partitioning and integrating modules.

Product innovation through module dynamics: A case study

Through research into new product development processes at a precision device maker, this paper discusses the skilful management of knowledge boundaries that lie between various organizations, and between specialized human skills and functions that make up a project organization, and presents the ways in which new organizational capabilities are brought about for the development of new products, as exploratory activities that dynamically merge and integrated the various knowledge within a company. This paper describes some of the implications derived from analysis and observations of the new organizational forms of the company's ambidextrous R&D management which the company uses to engage in both 'uncertainty management (exploration)' and 'existing product management (exploitation),' through the partnering of its existing formal organizations and dynamic structuring of diverse multifunctional teams formed as projects spanning different specializations and capabilities.

Tomoatsu Shibata

Papers

Empirical analysis of evolution of product architecture: Fanuc numerical controllers from 1962 to 1997

Strategy transformation through strategic innovation capability – a case study of Fanuc

Beyond fusion towards IoT by way of open innovation: an investigation based on the Japanese machine tool industry 1975-2015

Product innovation through module dynamics: A case study

Research into Ambidextrous R&D in Product Development New Product Development at a Precision Device Maker