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Knowledge Management > Book Reviews > Hitotusbashi on Knowledge Management >

Hitotusbashi on Knowledge Management

By Hirotaka Takeuchi and Ikujiro Nonaka (eds)

2004 John Wiley and Sons (Asia), Singapore

369 pages

Review by Madanmohan Rao madan@inomy.com

Legendary KM experts Hirotaka Takeuchi and Ikujiro Nonaka are back with a timely compilation of essays on knowledge networking techniques in business organisations, particularly in Japanese companies facing the heat of 21st century change and competition.

Knowledge management (KM) is now at the very centre of what management has to do in today’s fast-changing environment, Takeuchi and Nonaka begin.

The nine writers in the book are all professors from the graduate school of international corporate strategy at Japan’s Hitotsubashi University (hence the name of the book). The 12 chapters in the book cover a range of issues: KM processes, innovation, strategy-making, inter-organisational KM, dialectics, modular KM architectures, and case studies.

KM can be defined as the process of continuously creating new knowledge, disseminating it widely through the organisation, and embodying it quickly in new systems, products and services.

Takeuchi and Nonaka identify a category of companies called “dialectic” companies, which are not just passively coping with paradoxes but actively embracing opposites and cultivating contradictions.

“Knowledge is not either explicit or tacit. Knowledge is both explicit and tacit,” the authors explain. Companies need to embrace a whole multitude of opposites at the same time; tensions between different traits can provide the necessary variations and nuances for resolving the situation. The opposites often depend on one another, and successful KM is about harnessing the thesis-antithesis-synthesis spiral. The new reality is not something which lies between the opposites but is entirely new.

Dialectical thinking calls for a synthesis of body and mind, individual (knowledge creator) and organisation (knowledge amplifier), top-down/bottom-up/middle-out flow, hierarchy and task force, global and local focus, and Western and Eastern thinking. Other dimensions include small and large, public and private, cooperation and competition, new and old.

It is important to see organisations as holistic living organisms, not just as machines for information processing, the authors caution. Knowledge creation is the responsibility of everyone in the organisation, not just a select few specialists. Care should be taken to break away from group-think and inertia based on past successes.

 “In this day and age of the Internet, the quantity and quality of explicit knowledge that can be accumulated have expanded exponentially and the conversion of explicit knowledge into explicit knowledge (conversion) can be now carried out almost effortlessly with a few keystrokes,” Takeuchi and Nonaka observe.

  “The future belongs to companies that can synthesise the best of the East and the West and construct a universal model of organisational knowledge creation,” they advise.

A dialectical organisation is always on the move. “Knowledge is created through the synthesis of contradictions, instead of by finding an optimal balance between contradictions,” according to the authors.

IBM and Canon are good examples of dialectical companies. IBM’s Lou Gerstner combine multiple insights as an outsider and insider, and synthesised a customer-centric integrated approach for the company with a strong emphasis on passion, ideals and emotions. Canon successfully juggled US and Japanese styles of management, between policies of no-layoffs versus profit-comes-first.

“According to the KM paradigm, we are part of the environment and the environment is part of us,” explain Takeuchi and Nonaka.

The knowledge spiral involves four processes:

- Socialisation (empathising or sharing tacit knowledge via apprenticeship, conversations and brainstorming: individual to individual,
a function of organisational culture)

- Externalisation (articulating tacit knowledge via concept clinics: individual to group)

- Combination (connecting or systemising explicit knowledge: group to organisation, with roots in the information processing paradigm)

- Internalisation (learning or embodying new tacit knowledge: organisation to individual).

The knowledge spiral is based on the two dimensions of knowledge creation: epistemological (explicit/implicit) and ontological (levels: individual, group, organisation, inter-organisation).

The process of knowledge externalisation has been largely neglected in organisational literature, according to Takeuchi and Nonaka. “When adequate expression cannot be found, metaphors and analogies become useful tools,” they advise. Examples include Honda’s slogan “theory of automobile evolution” which led to the creation of the innovatively designed Honda City car, Canon’s use of a beercan analogy to find the breakthrough which led to the mini-copier, and Sharp’s focus on “first products.”

Figurative language, symbolism and even poetic terms can be useful here, such as Honda’s slogan “man-maximum, machine minimum.” Internal competition, team rotation, and redundancy or overlaps of task areas and team configurations are important here because they create frequent communication and dialogue. This helped Canon, for instance, diversify into a wide range of office automation products.

Defining a company’s conceptual umbrella, articulating knowledge aspirations, harnessing chaos, and still staying on course are key challenges for CEOs. This helped Mazda, for instance, persist and eventually come up with its Savanna sportscar design.

Enabling conditions for successful KM include intention, autonomy, creative chaos, redundancy and variety of perspectives. The authors also discuss concepts like fusion of horizons, interaction rhythms and chaos theory.

Barriers to knowledge creation arise at the individual level (eg. resistance to change, perceptions of threat) and organisational level (lack of common language, organisational stories, supporting structures, industry paradigm). Support should be given to create, justify and “cross-level” knowledge.

Instilling a knowledge vision, managing conversations internally and externally, mobilising knowledge activists and creating the right contexts are important components of a knowledge advancement strategy.

“The most natural and commonplace of human activities – conversations – often end up in the background of managerial discussions about knowledge. We cannot sufficiently emphasise the important part that conversations play. Good conversations are the cradle of social knowledge in any organisation,” according to Kazuo Ichijo.

“Knowledge activism” should be supported by preparing participants in knowledge creation tasks, nurturing communities and providing tools and time for knowledge creation at all levels.

“Knowledge needs to be fully utilised on a global scale. If you depend too much on tacit knowledge and knowledge conversion around tacit knowledge, you will lose time and the value of coordination. Speedy externalisation and combination of knowledge conversion is a key to attaining both cost efficiency and differentiation on a global scale,” advises Yoko Ishikura.

The book also features case studies of KM in action in a number of companies, particularly in Japan. Seven-Eleven Japan uses a combination of walking-around employees, field counsellors and zone managers for giving knowledge networking a human face. Siemens and 3M allow individual workers to participate in knowledge-creation projects. Lexus relied heavily on experimentation, diverse perspectives, and dialogues among multiple layers of extensive communication networks.

Focusing on radical innovation based on value differentiation and not just functionality helped Sony come up with classic products like Walkman and MAV-55 disc recorder. Sony is now excelling in context creativity: it treats brand as ba, showcases brand as place, and provides a ba for customers to experience the Sony brand – for instance, via the construction of amusement facilities.

KM (including outsourcing and external collaboration) helped Olympus launch new digital still cameras, but it faced challenges in handling global knowledge management, especially regarding operations in new international markets and understanding new competitors and emerging technologies. Designing ba for international partners and documenting knowledge for effective manuals became a challenge.

The runaway success of Japanese operator NTT DoCoMo’s i-Mode wireless Internet service has become the focus of a number of benchmarking studies and business model innovation books. DoCoMo’s business model regarding technology platform, content alliances, customer centricity and management styles are important sources of learning for organisations around the world, especially in the wireless sector.

DoCoMo’s KM practice involves an intricate mix of inter-group, intra-organisational and cross-industry knowledge sharing environments. Takeuchi and Nonaka have evolved elaborate theories of knowledge nurturing in environments called ba, a combination of physical and virtual contexts along with relationships, agents and processes for knowledge emergence and alliancing. The term ba refers to a space-time nexus, the physical and/or mental space shared by co-workers, whose nature defines the scale and scope of knowledge creation through its various phases like socialisation (originating ba), externalisation (dialoguing ba), combination (systematising ba) and internalisation (exercising ba).

DoCoMo was able to evolve entirely new knowledge models for its path-breaking wireless Internet service via a combination of a number of factors: bringing together employees with entirely different knowledge backgrounds, creating conducive knowledge emergent environments, shielding this environment from external conflicts, and opening the doors to external knowledge partners.

DoCoMo had a diverse management group: Keiichi Enoki (former branch manager, with an outspoken and non-conservative nature), Mari Matsunaga (editor-in-chief of a classified-ad magazine for women), and Takeshi Natsuno (an Internet entrepreneur). Each brought to DoCoMo expertise in different areas: network externalities (Natsuno) and consumer focus (Matsunaga, who used creative metaphors like “personal concierge” to explain personalised data services). Enoki helped shield or cocoon this group from the strong bureaucratic and conservative culture of the parent organisation, NTT, and played the role of knowledge activist by creating the appropriate tipping point.

Ground-breaking concepts of the entirely new wireless Internet service i-Mode grew in this energising environment with permeable boundaries. This environment was also open to knowledge co-sensing and co-creation with value chain partners like content providers and banks, rather than conducting all the knowledge creation internally. These knowledge models enabled the i-Mode success story to spread its wings beyond the borders of Japan to other parts of Asia and to Europe and the US as well. 

Though Japanese companies seem to excel in experience-based knowledge activities, they face the danger of being left behind the pace of change that is taking place in the Information Revolution, the authors warn.

Christina Ahmadjian also raises concerns about whether the Toyota-like model of interorganisational knowledge networking (between close, stable groups sharing a regional identity and history) will be sustainable for technology players in a world where Silicon Valley-like models are also becoming important with their fluid, diverse and rapidly-reconfiguring networks. The Toyota model is good for externalisation, while Silicon Valley excels in combination. The challenge for Japanese is to rely less on existing rigid networks of close affiliates, while also building knowledge recombination skills via diffuse networks of professionals.

The concluding chapter addresses how dialectical knowledge creation is practised at Hitotsubashi University’s new MBA program, created as an attempt to fill Japan’s gap in world class business schools. It blends a range of socio-business approaches including affiliation with leading corporations as well as a human touch via volunteer work for disabled citizens.


Madanmohan Rao is Editor-at-large of DestinationKM.com and editor of two book series, “The Asia-Pacific Internet Handbook” and “The KM Chronicles” (www.tatamcgrawhill.com/digital_solutions/madan)

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