Chapter

A Theory of the Firm's Knowledge‐Creation Dynamics

Ikujiro Nonaka and Hirotaka Takeuchi

in The Dynamic Firm

Published in print September 1999 | ISBN: 9780198296041
Published online November 2003 | e-ISBN: 9780191596070 | DOI: http://dx.doi.org/10.1093/0198296045.003.0010
 A Theory of the Firm's Knowledge‐Creation Dynamics

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The thesis that the apparent success of Japanese firms rests on their ability for creation of organizational knowledge is explored. The Japanese experience is taken as a launching pad for a proposed more general theory of how knowledge is, and can be, created in organizations. Two simultaneous knowledge spirals are identified as evolving over time: first, knowledge is created and expanded through the social interaction between tacit and explicit forms of knowledge in a process that is called knowledge conversion—the different modes and requisite enabling conditions that maintain this knowledge spiral are traced; second, another spiral describes how knowledge created at the individual level is transformed into knowledge at the organizational level through a phased process. As the spirals interact over time, innovation is seen to emerge. Clearly, there is a certain normative bent to this view of knowledge creation, and it implies some important lessons for non‐Japanese firms.

Keywords: companies; firms; innovation; Japan; knowledge creation; organizational knowledge; theory

Chapter.  11167 words.  Illustrated.

Subjects: Microeconomics

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