Essay on The Knowledge Creating Company

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Article’s purpose
Ikujiro Nonaka claims accomplishment of Japanese companies is largely owed to their skill and proficiency in organisational knowledge formulation, particularly in creating continued business innovation. They designed slogans, analogies and metaphors which represented the company’s ideas and mission. They further illustrated the impact of tacit knowledge had on creation of ideas and products such as the creation of the Honda City, Honda’s innovative urban car....which was created by a slogan “Theory of Automobile evolution”. (Nonaka, I. 1995 p97) The article blends theoretical and philosophical reasoning with factual case studies. Nonaka (1995) explains the complicated forces at struggle within innovative business structure. Not exactly a straightforward read, but Nonaka rationalises this with the declaration that ' … managers can no longer afford to be satisfied with simplistic ideas about knowledge and its creation'.
Seeking new knowledge is a globally recognised obligation for businesses. But that wasn’t the purpose of the article. Nonaka wanted to parade the distinctive perception of knowledge between the west and the Japanese companies; in which both realised innovation is the way forward. The aspiration behind the articulation of the article was to present the contrasting interpretation of knowledge by the west compared to successful Japanese companies. Nonaka (1995) sheds light on the offbeat ways of thinking about knowledge and its role in business organisations. These ways are found most commonly at highly successful Japanese competitors like Honda, Canon, Matsushita, NEC, Sharp, and Kao. Nonaka (1995) directs the attention to the two contrasting styles of knowledge creation, explicit and tacit. Explicit knowledge is formal and systematic, whilst tacit knowledge has an important cognitive dimension. It consists of mental models, beliefs, and perspectives (Nonaka, I. 1995 p98). Michale Polayni’s famous quote, “We can know more than we can tell” summarises tacit knowledge in a nutshell (Nonaka, I. 1995 p98)
Unlike other concepts of learning organisation, Nonaka (1995) puts the emphasis on internally generated learning, tacit knowledge acquired through experience and practise rather than scanned from the environment or learned through formal systems. Nonaka (1995) suggests that Japanese companies integrate Innovation oriented approaches; managed by “Kaizen” Philosophy which channels improvements which takes place by the involvement of everyone. It further stresses on TQM (Total Quality Management) OR TQC (Total Quality Control) which refers to enhancement of quality of personnel, products and production procedures. The article makes it explicit the link between knowledge, innovation, organisational and renewal in a way that few other writers have done. Nonaka (1995) urges western companies to follow the Japanese lead in this field. (Witzel, M. 2003 p251) Nonaka wanted to show that the west needs to evolve from machine oriented, explicit knowledge which is “deeply ingrained in the traditions of western management, from Frederick Taylor to Herbert Simon” (Nonaka, I. 1995 p96) to a more holistic approach to knowledge used by many Japanese companies. The concept is to “see the company not as a machine but a living organism.” Japanese companies look to tap the tacit and often highly subjective insights, intuitions, and hunches of individual employees. To western managers, this approach seems odd or even incomprehensible. However Nonaka explains the case of Saka based Matsushita Company in 1985 where tacit knowledge of the head baker of Osaka international hotel was used to produce the explicit specifications for the home break making machine that later went onto break sales records. This shows tacit knowledge is a crucial factor in a knowledge creating company.
Contribution to the Subject Area
Nonaka’s proposition in “The knowledge-creating company” has accomplished paradigmatic position since the
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