Very clear and concise explanation of knowledge creating company article by Ikujiro Nonaka

1. The knowledge creating
company
Vijay Yadav
076MSCSK020

2. What is knowledge creating
company ?
Consistently create new knowledge
Disseminate it throughout the organization
Embody it in new technologies and products

3. Western vs Japanese perspective
• Western views the company as machine whereas Japanese view the
company as living organism (having sense of identity and
fundamental purpose just like an individual).
• For Western slogans are only meant for advertisement and not for
running company, but for Japanese slogans are highly effective tools
for creating new knowledge.

4. Tacit knowledge
• Highly personal
• Difficult to communicate
• Deeply rooted in individual’s commitment to a specific context
• Difficult to articulate the scientific and technical principles behind it.
Michael Polanyi “ We can know more
that we can tell.”

5. The spiral Knowledge
New knowledge always begins with the individual

6. Critical steps in the spiral of
knowledge
• Externalization (Articulation)
• Internalization
Because both requires individual’s active
involvement and personal commitment.

7. Expressing the inexpressible (using Metaphor)
“Let’s gamble”
“Theory of Automobile
evolution”
“Man-maximum, Machine-
minimum”
Birth of a product called
“Tall boy”
Company’s distinctive
urban car providing
more room for
passengers while
taking less space on
the road
Top level
management
Product team
leader
Team members
Honda’s
example

8. Metaphors express the Tacit knowledge, often
appearing contradictory.
Reconciling the conflicting meanings within
Metaphor is the first step in converting the tacit
knowledge into explicit knowledge
The next step is Analogy (giving more clarification
of Metaphor)
The last step being creation of Model.

9. Redundancy is important in creating new
knowledge
Canon uses the “Principle of internal
competition” for redundant product development

10. Ambiguity can be extremely useful for company during the
times of crisis or breakdown (i.e. when all the traditional
methods stop working).
Ambiguity provides new way to think about things.
It’s the job of manager in knowledge creating company to
convert the chaos into meaningful knowledge.
New Knowledge is born in chaos

11. Values of newly created Knowledge
Apart from increased efficiency, lower costs, improved ROI
(Return On Investment):
• Must embody company’s vision
• Dedicated to uncompromised value of the company
• Express top management’s aspirations and strategic goals
• Potential to build company’s organizational knowledge
network

12. Conclusion
• Knowledge creating technique is what makes Japanese companies
different from others in innovation
• Human beings are not only information processor but also
information creator
• Organizational values, visions and employees personal commitment
helps the company in innovation through knowledge creation