Two leading Japanese business experts Ikujiro Nonaka and Hirotaka Takeuchi are the first to
tie the performance 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 convert 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. 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 twenty-first 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 change 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 new knowledge organizationally and how to exploit it
to make successful products services and systems.
