Theory of Organizational Knowledge Creation the provous chapter, we saw that the distinctive appronch of| Wester philosophy to knowledge has profoundly shaped the way organitational theorists treat knowledge. The Cartesian split be- {veon Eubjeet and objet, the Enower and the known, has given birth to'e view of the organization as a mechnism fer information pro- ‘exsting.” According to this view, an organization proceste information from the external enviranment in onder to adapt to new ereumstance, “Although this view has proven tobe effective in explaining how org nizations function it has a fundamental Kmitation. From our perspec: tiv, it dots not rally explain innovation, When orgeniztions inn vate, they do not simply proses information, from the outside i, in larder solve existing probleme and adage to a changing environment, ‘They actualy create new knowledge and information, frm the inside ‘out, in order to rodefine bath probleme and solutions sd, ia the pro est, recreate thei environment To explain innovation, we need anew theory of organizational knowledge creation. Like any approach to knowledge, it wil have its own epistemology” (the theery of knowledge), although one substan tally diferent from the traditional Western spproach, The cornerstone ‘four epstemelogy isthe datnction between tacit and explicit knowl ‘ig, A we wil se in this chapter, the key to knowledge creation ios Inthe mobilization and conversion af act knowledge. And becass we fare concerned with onganizational knowledge creation, as opposed individual knoWledge eration, our theory wil also have is own di a _=—=—Se itive “toy” whic i conserned withthe levels of knoe (eating entities (individual, group, organizational, and inter: rpnnistionl). In this chapter we present our theory’ of knowledge ‘Feaion, keeping in mind the. ro dimensions epistemological and SRtulogial"of knowledge creation. Figure 1 presents the epistemo- Jpult and ontological dimension i which a knowledge-ereation “bi ‘Stakes place, A spiral emerges when the interaction betwoen eit ‘Rad Capliit knowledge is elevated dynamically from a Tower otoogi- ‘aleve to blgber level. “The core of eur theory lis in deseribing how such a spiral emerges We press the fu modes of knowledge conversion that are crestad Mhektactt and explicit knowledge interact with exch other. These fur ‘Wokea which we refer to s8 socialization, externalization, combina Tom and internalization constitute. the “engine” of the entire Fooedge-crestion process, These modes are what the individual ex ‘ellencas, ‘They arevalo the mechanims by which individual knowl ge aes atielated and “amplified” into and tation. After lying out these four modes and “ih ‘rape, it verb oon ht eae rot hs Shia! model of organizational knowledge creation. We also present & FRepaace procens through which knowledge is eretled over time ‘vithin the organization. Knowledge and Information ing how knowl- Before delving into our thoory, we ist uur to describing ‘igo i cular to and diferent fom infarmatio. Three observations Figure 3:1. Two dimensions of knowlege cretionecu apparent intl ton Fin, knowles, nlite formation, {Stout fel and commitment Koowleige function of parti. ar tance, perspective, or ntanon, Sed, knowlege, ule infor. ‘ani sion ay wie ie Ao {ira Knvlege ke informatio, ie about meaning. I a cota specific and relational. “ Tn our theory of orgenizational know edge costo, we adopt theta dito deition of ontedge ae Juted tae bel" shou be Sed however, tot ile ado Westasepatemology has {ivd on “rtf ar the eset atibte of knowiedss, we highlight the metre of koowledge ag uid ble” Thin fren inves intoduer another etl denen Ertreen the view of ihowiedge of traditional Western epistemology and that four teary of knowledge creation, While tedhtonal epistemology emphasing the thon ssticand' noun nature of Knowle, Opa preced in propeitions and formal lg, we consider knowiedge a= Aare human proce of justine proliant eh “Athougthe-toone Sintocmation™ and “knowledge are often ted interehangeely, there in clear ditncion between information sad oowlege: Ax Batnon 197) pati information eon of flee cs tha make a diflerenes” (9) Yaormation provides new pint Sf ie for interpreting events or objects, which makes vate pre: Sowly ive eninge or thes Highton wnexpesed connections. Thus Information ie» nefsenary medion or atria or ting and ert SOTA: TE aos ed y adding wm itor retrucoMg We OMaclup, 1960, Smslary, Dretske (1981) ae {rd fll “formation i commodity expabe of paling know ‘Sg. and what information algal eres in what we ean lara rom ie Kaowlege i Menined with information produce (or sa tain ble (gp, 8, Information cab vewod from two perapetves: “eatate” (or vol tamu abd “semantic” (or meaning 0 fran. An Martin af Ing, although Shannon himself adritted tation is problematic! The semantic sepect of Information is more ‘portant for knowledge creation, aa It feasts on conveyed meaning, If one limits the span of consideration to tho eyntactic aspect alo fone cannot capture the real importance of information in the nowiedge-ceaton proces, Any preceeupaton withthe formal defi tion of information will lead toa disproportionate emphasis onthe role tf Information processing, which i innenstive tothe eeation of new equivocal sea af information flow of messages, while knowled sentially related to human action Searle's (1960) discussion of the ‘Speech at” also point ‘lationship between language i human ation in terms of “intention” and the “eommitment” of fpoakers, As a fundamental basis for the theory of organization owiedge ereaton, we focus attention onthe ative, subjective natare tt knowledge represented by wich terms as “eommitient” and "belie {hat are deeply rovted in individual’ vale systems "Pinal, both inarmt ae text-apeiic and re latina Ta that they depend on the situation and are erested dynam ‘Sil in sctal interaction among people. Berger and Lackmann (1966) “rae that people interacting in certain historical and socal context ‘Hise information from which they eatruct oval knowledge ax ane “tty, which in turn influences their judgment, behavior, and atitude Similarly, a cororate vison presentod as an equivocel strategy by a Jender is oeganitationally constructed into Knowledge through interac tion with the enviroment by the eaportion's members, which n fun ff its business behavior, ‘Two Dimensions of Knowledge Creation ‘though much hes been writen about th importance of knowiedgy ‘a amement, le atetion has een pld to how knowledge i Slesad and how the koowldgereain proces is manage. In tht ‘Seton we wll develop a ramevor in whic raiinal and ostrad- SShalsioe of tmowedge are ntgrated into the theory of oreo tinal knowledge eration, As mentioned earier, our base framework andias toe dentine epistroogeal and ontaogical eo Pinte 2b. = ‘Tatu tart withthe ontlaglsldensin. In src sense, know dee in ental any by india Ri rpaination cannot crest ‘GEricage witout ndviduss, Te sganzation supports creative S- “eden or pode ones for them fo rela haowicdge, Orga {foal Krowleago erento, therefore sould Be understand na provi {hoerueganisaonaly" emplifs the knmwledgeereatod by indivi Sha calles ea par of the owes network ofthe orgie: 0a Ths proces tales place within an expanding "eommuniy of i- werctta: Phi crc Into abd terorganzainal Levels ee ar se epistenas Michael Pol “Ano he. sical dimension, we daw on Michel Polanys (130 dinkslon betvesn toot Hnotedge nd expt’ howled. {Tam owed Ie pero, eontexrpecie, and therefore hard to or Tulle and communicate Expt o atid knowledge om he ohee Tan ies to knowledge hati ransmtable in forma, systematic rant Polany argument on the importance tact Knowledge in rom Soention may correspond tothe ental argument of Getlk Tope tic hav anced st prepton determined in Termsof the way its intograted into the overall pattern ot Gestalt, However, ‘while Gestalt prychologystrosees hat al mages ane intrinsically ine {rsted, Planyl contends that human being require knowlge by e- {ively ereating and organizing thet own experiences Thus, knowldge that can be expressed in words and numbers represents only the tip of the icborg ofthe entire body of knowledge. Ax Polanyi (1906) pat i, "We can know more than we eat tel” (p. 4) 1 traditional epistemology, knowlede derives from the separation ‘ofthe subject andthe objet of perception: human beings ax the sie ‘of pereption acquire knowledge by analyzing external objects. In con ‘rast, Planyi contends that hutnan being create Knowledge by inva ing themselves with objets, thats, through self. involvement and com ritment, or what Polany called “indwelling” To know something io tw erate its image or patter by tacitly integreting particles, Inc der to understand the pattern as meaningful whole, tis necessary to intagrate one's body with the particulars. Thus indwelling brea the traditional dichotomies between mind and body, reason and eo- tion, eubjedt and objet, and Knower and known, Therefore, scene tjeuiity is not sole source of knowledge, Much of ur knowledge ie the fruit of our own purposeful endeavors In dealing with the world ‘While Polanyi argues the contents of tacit knowledge further in « philosophical content, Its also possble to expand his idea in a more practical diretion. Tacit knowledge inludes cognitive and technical Sloments. The cognitive elements center on what Johnson: Lair (198) ‘alls “mental models" in which human beings create working odes Gf the world by making end manipulating analogies in their mind, ‘Mental models, such as schemata, paradigms, perepectivs, belief ad ‘viewpoint, help individual to pervivo and define their word. On the ther hand, the technical element of tacit knowledge includes concrete Jnow-how, ers, and ails. I x important to nae here that the cg nltive elements of tact knowledge refer to an individual images of reality and vision for the futur, that is what ie” and "wht Ought tobe.” Ac will be dzeuted later, the articulation of tacit mental mod ls, in @ kindof mobilization” process, ins key fctr in centing ne ‘knowledge. ‘Some distinctions between tacit and explicit knowledge are shown in ‘Teblo 3-1. Features generally aasocated with the more tae aspects of knowledge ae listed on the let, while the corresponding qualities re Jated to explicit Knowledge are shown on the sight. Far example, nowledge of experience tends to be tacit, physica, and subjective, ‘while knawiodge of rationality tends to be explicit, metaphysical, and objective. Tecit knowledge i ereated “here and now" In «specie, proc: tical contest and entails what Batecon (1073) refered toss “aalog” ‘quality. Sharing tnt knowledge between individuals through com lation Ie an sntlog process that requzes lind of “simultencous roceating” of the complexities of inne shared by the individuals, On “able 2.1. Two Type of Knowledge Tet Reeves —~—~S*S*CRGE Kr (ee Sane knowin Spee nee the other hand, explicit Knowledge is shout past ovents or cbjets there and then” and is oriented toward a contax-freothoary.* Tt is sequentially ereatd by what Baton calls “digital” activity Knowledge Conversion: Interaction Between Tacit ‘and Explicit Knowledge ‘As dacussed in Chapter 2, Ue history of Wostern epistemology ean be teen a a continuous controversy about which type of knowledge is fnore truthful, While Westerners tend to emphasize explicit know ze the dapaneae tend to stress tet knowledge. In ur view, how rer, tact Knowledge and expliet knowledge are not totally weparate ‘bot mutually complementary entitien They interact with and inter ‘change ino each ether inthe creative activities of human beings. Our fynamic model of knowledge eration is anchored terial assom- tion that human Knowledge is ereated and expended through social Interaction’ bobwedrLaclt kiwege and explicit knowledge. We eal this interaction "knowledge conversion” It should be noted that this ‘enverson is a “wpeal” process between individuals and not confined tethn an indigo,” According tothe rationalist view, humid cOgn- ‘iene a deductive process of individuals, but an individoal is never {cnlatd fom socal interaction when he or she perceives things. Ths, through this “toial conversion” procs, tact and explicit knowledge txpand in terms of both quality and quantity (Nonake, 1990b). "The iden of “knowledge conversion” may be partially consonant with the ACT mode (Anderson, 1883; Singley and Anderson, 1969) devel oped in cognitive peythology. This model hypothesies that for eogn {he sills fo develop all declarative knowledge, which corcesponds ‘explicit knowledge in our theory, has to bo transformed into procedural Knowledge which corresponds to tacit knowledge, used in sich activi= ties as ring a bicyele or paying the piano. But as Singley and An- ‘deren adit the ACT model as one limitation, I views the transi tation at a special cate, baceuse this model's research interest is feeased on the eoqistion and transfer of procedural tacit) knowledge, tot delarative(erliid knowledge In other words, proponent of this‘model consider Knowledge transformation at mainly unidirectional fom delartive explicit) to procedural eal), whereas we argue that the transformation Is interactive and spiral. Four Modes of Knowledge Conversion The ssumption tha ade crated thro he ineration tere act aden Knits sllws uo tlt fren Indes of knowledge conversion Ty ar ar low (0) fom fat toa to ta havdge, che cll eclzatint (Df {ict knowing exactly, or extermlinton fy Ph oe nmi etd txplctknowidge tol kwldge or nsaantion* Thee 0 {tar typeof Ktwldge conversion -sedlizaten, cna, and {nteralntion have been dined fom varius especies {tional thay. Po example, weiliain i oeced with the Errne of rep paces and oratitatienal care, Sonbination ha ta eosin information promsng an internalization i oval sted rata iaing Herr, exertion as en Senha peed Figure Sf shows te fur mde of ao Carvin ath of eee ds of knowlege conversion wl Se ‘iced in dtl blow slong wih aa! cxamls Socialization: From Tacit to Tacit Socialization isa process of sharing experenoes and thereby crating tacit knowledge ach as sharod mental models and technica! skills ‘An individual can aeqlee tacit knowledge diretly fom thers without BoE ge] lntatnon Combination igure 3.2. Four mdse of knowladge conversion. using language. Apprentices work with ther matters and learn crafts: ‘manship not through language bu Uarough observation, imitation, and practice, Inthe business soting, o-thojob training uses basically the me principle, The key to aogulring tacit knowledge is experienc See ee ee ir ataeeoy ai or tne peran to project her or himself into another individ proces, The mere transfer of information wil often make Wit abstreced from asocinted emotions and specific contexts in tthich shared experiences are bedded. Tho following three examples trate how salization is employed by Japanese companies within the pruduct development context, "The first example of scialiantion comes from Honda, which set up “pralnstorming camps” (ama dashi hal—informal meetings for de- tailed discusions to solve diffele problems in development project, ‘The meetings are held outside the workplace, often at a resort inn Gree pertipants discuss diffcalt problems while drinking sche, having mesa, and taking e bath together in a hot spring. The meet {ge are nt init to prec team members but are open to any et Dloyees who are interested in the dovelopment project under way. In These dincusions, the qualifications or ratus of the discussant are never questioned, but there is on taboo: eritiism without constructive ‘gestions, Discussions are held rth the understanding that “mak ing entice fe ten tines easier than coming up with a constructive ternative” ‘This kindof brainstorming camp is nt unique to Honda ‘at has been used ty many other Japancee firms. I is also not wnigue to developing now products and services but is also used to develop ‘nanagerial systems or corporate strategies Such a camp isnot only & forum for ereative delogue but also medium for sharing experience hed cohancing mutual ust among pariipants Tt is particularly ‘Mtective n acing tacit knowlege and ereting a new perspective {eorlente the mental models of all individuale m the ste direction, ‘hut not in a foenfel way. Instead, brainstorming eampe represent & tmecheniam through which indiwiduala search for harmony by ena {ng themosive in bodily as well as mental experiences. ‘Phe recond example, which shows how a tact technical skill was socialized, comes frm the Mateishita Electric Industral Company. A ‘jor probleme the Osakarbased company in. developing am auto. atic ome breed-making machine in the late 1980s entered on how {a mechanize the dough kneading process, which is essentially tacit Knowiedge posseaed by master bakers. Dough kneaded by a master baker and ly a machine were s-rayed and compared, but no mesning ful nights were obtained, Ikuko Tanaka, head of software develop- Int, knew thet the area's best rend eame from tho Osaka Interna UHonal Hott, To capture the tacit knowledge of kneading el, he and foveral engineers volunteered to apprentice themselves tothe hotel's Ihead beter. Making the same dliious bread es the head baker's wasrot eary, No one could explain why. One day, however, she noticed that the baker was not only stretching but alan “trating” the dough, hich turned out tobe the soeret for making tasty bread. Thus she “eialized tho head baker's tact Knowledge through abeervatin, iit: ‘on, and practice ‘Socialization alco occurs between product developers and customer Interactions with customers belore product development ad aller mar. ‘et introduction are, In fact, « neverending process of sharing tacit ‘knowledge and ereating ideas fur improvement. The way NEC devel oped its frst personal computer ie a cae in point, The new-prodact ‘development process began when a group from the Semiconductor and IC'Sales Division conceived ofan ea to rll Japan's fst mlerocr pater kit the TK-80, to promote the tales of temieonductr devices Sling the TK-80 tothe public at large was x radial dapeture from NEC's history of responding to routine orders from Nippon Telegraph and Telephone (NTI). Unexpectedly, a wide variety of customers angingffom high school students to profesional computer enthosi ast, camo to NEC's BIT-INN, a display service centr in the ARiha= ‘ara district of Tokyo, which ie famous for its high concentration of «lectronie goods retailers. Sharing experiences and continuing dia- logues with thee customers atthe BIEN resulted inthe develop it of NEC's bestsling personal computer, the PCO, 2 few yours later. Externalization: From Tacit to Explicit Exteralization is process of articulating tacit knowledge into ox plicit cmogpta. T ie 8 qulntewentnl knowledge- ods) “tetaper! ‘hate ote eee (soelgy {pce hough minting sonar Sad scar Tal Boy oy ‘Cane ‘cna fons bread fete ‘atta teaphen an ‘Sehnert tet a argue that “metaphors create novel interpretation of experience by ing the listener to see ane thing in terms of something else” and ron new ways of experiencing reality” (pp. 48,82). Thus, “meta hoes art one communiention mechanism that ean funetion to recoeile iscrepancies in meaning” (p48). Moreover, mictaphor isan important tol for creating network af nov consis, Breause @ metaphor ie "wo Uoughts of diferent things “Kipported by a single word, or phrase, whose meaning is rule {ant of their interaction” ichards, 1988, p. 89), we can continuously ‘alwe concepts that are far apart in ou mind, even relate abstract ‘onowpts to concrete ones This creative, cognitive process continues af e'atink of the similarities among concepts and feel an imbalance, Jheonsistency, or contradiction in their associations, thus often leading {othe dacoveryof new meaning or oven to the formation of new pat adigm. \Coniraictons inherent in a metaphor are then harmonized by anal ogy, which reduces the unknown by highlighting the “eommonnoss” of {he diffrent things, Metaphor and analogy are often confused. Assoc. on of two things through metaphor is dven mstly by intstion and ‘ollie imagery and docs not sim to nd differences between them, On fhe other hand, association throngh analogy i carved out by rtional {inking and focuses on stractaraifuctional similarities between two things and henee their differences. Thus analogy helps us understand the unknown trough the known and bridges the gap between an im te and a Igical mol. ‘Once explicit concepts are eeated, they can then be modeled. In a Iopical enodel, po contradictions should exist and all concepts and prop- ‘nti must be expresed in aystematic language and coherent los. Butt usiness term, models are often only roush descriptions or ‘awing, far from being flly spec. Models are usually generated flow teetaphart when new ‘concepts are created in the business Combination: From Bxplict to Explicit Combination sa procees of systemizing concepts into a knowles aye: tim, Tis mode of knowldge conversion involves combining diferent odies of explicit knowledge Individual exchange and combine know! ‘ge though such media as documents, meetings, telephone conversa- lone, or computeroed communication notworks. Reconfiguration of ‘ining information through sorting, adding, combining, and categs- ‘ining of explicit knowledge (as conducted in computer databases) can Toad to new knowledge. Knowiege creation caried otis formal ed Cation and teining at schools Goualy takes this for, An MBA educa fon fe one of the bat examples ofthis ind Th the buniness conten, toe combination mode of knowledge onver-Son i most often sen when middle managers breakdown and ope tonaliz caporate visions, burinese concepts, or product concep Mi fle management plays rieal role in creating new concepts through, retworking of coliled Information and knowledge. Creative uses of ‘omputeriaed communication network and large-scale databases fal- late this mode of knowiedge conversion.” ‘At Kraft General Foods, a manufacturer of dsiry and processed ‘ods, data fom the POS (point-ofaales) system of retailers i ule ‘ot enly to find out what does and dos not sell well bit alan to create new “ays to sll" that is, new sales systems and methods, The comm pany has developed an infrmation intensive marketing. program falled "mnieromerchandlsing,” which provides supermarkets with timely and precise recommendations on the optimal merchandise mix and with sues pramotions based on the analyte of dats ft ts micro ‘merchandising system. Ullaing Kraft individual method of data thal, including its unique clasfcaion of stares and shoppers into fix ctogories, the ayetem in capable of pinpointing who shope where tnd how. Kraft succesfully manages ite preduct sales through super: markets by controlling four elements of the “eategory management” Imetholslogy—consumer and category dynamics, space management, Imerchandizing management, and pring mangement ‘At the top management level ofan erganistion, the combination rode is realized when mid-range eoneepts (auch as product concepts) fare combined with and integrate into grand concepts (eich au orpor Tate vision) to generate anew meaning ofthe later. Introducing & new ‘porate image in 1986, for example, Asshi Breweriey adopted {rand eoneapt dubbed “ive Asahi for ie peopl.” The concept stood for the meaeage Unt “Asahi will provide natural and authentic prod ‘ucts and services fr Chose who seok sctve minds and active Ives” ‘Along with this and concept, Asahi snquired into Use exsenceof what ‘make boor appealing, and developed Anahi Supet Dry beer beso on the new-produté concept of “richness and sherpnece" The new prodvct concep is a mid-range concept tart made the grand concept of Asahi ‘ore explicitly recognsable, which in tur altered the company’s prod- tet dovelopmentapatem. The taste of bee wae hitherto decided by en- incersin the production department without any participation bythe es department. The "richness end sharpness” concept was relied through cooperative preduct development by both departments, ‘Other examples of interaction between grand concepts and mid range coneapts abound. For example, NEC' “C&C” (computers and tommunications) concept ‘induced the dovelopment of the epoch ‘making PC-8000 personal computer, which war based on the i. ange concept of Paisiribated processing” Canon’ corporate policy, “Creation ofan excelent company by transcending the eamera bu nus" Ted tothe development ofthe Mini-Coplr, which was developed ‘with the midrange product concept of "easy maintenance” Mas't {rand vision, "Create new values and prevent joyful driving? was re Jnad in the new RX-7, “an authentic sport car shat provides an exit ing and comfortable deve. Internalization: From Explicit to Tacit Internalization isa pret of embadying exit knowledge int tact Knowledge Irs losely related to learning by doing” When exper Sco through svielztin,exteralnation and combination oe {Conlin into invidunt owed base nthe forma shared Ihental models or technical knowhow, they become valuable asst ‘Alte member ofthe Honda City project team, example, eterna ined thet experiences oft ote 1970s and are now making wo ofthat Know how rd leading RAD projet inthe compan. Fer organirationl Knowiedge creation take place, however, te tct knowledge ccm Intel atthe individal level nest bo stcalined wth eter organi {onl member, thereby caring anew pra of knowledge creation. For explicit Knnwledg to Bose tac it bpn ithe knowledge i verblite! ar dngrammed into documents, manuals, oF oral stores Documentation helpeindviduelsintermaine that they experienced tho enishing eel ate knowledge. In dation, documents or mana tlsfucitatethe transfer of expt knowledge to other peopl, thereby ring them experience the experiences of eters idee hi “re faperienes thom, GE, fr example, documents all customer com ‘lune and inguriest'adatabon at tx Answer Centr in Lovivil KKentacky, which can be sed, for example, by members of n new proluct development team fo "eexperions” what the telephone oper lor expriented. GE established the Answer Center in 1982 fo pro tear ection, requete for help, and complaints from estomers 99 Shy product 2 hours a Gay, 365 days a ear. Over 20 telephone oper ‘tors yeapund to es many se 14000 calla a dy. GE bas programed 1 mlion poten provens std ther soln ito computertod database sytem: The system ln equipped ith en online diagnos fiction ublising the latest ata nelignnce technology for quick tsuwers fo inguries any problensoltion response en be retsoved iy te telephone operator in two seconds In ease solution Is ot Svallable, 2 specinis with at lost four yours of Yepair experince {tink ou oistlons on ae, Four fll time programmers pot tesa lions into the database, a0 thatthe new Information i usally Sill ni the system by the following da. This infermation isnt {o tho reepotive product visions every manth Yt, the product div ‘Son ls roquenty send their new-prodct development people to the ‘newer Center to cat with the telephone operators orth 12 special fs therely“re-experencng” their experiners. Tnterzadon sons sr een abot baring acl r= cxpriene” eter popes experenes. For example, if reading orl {ltlng toa sce story maker some malar of tho organization el {Se ras ond execs ofthe story the experience et tak place Inthe past saay change into a tacit mental model, When such » mental ‘oodel is shared ly tat mettbers of Uae organisation, tacit knowledge becomes part of the ongaiational culture This practices prevalent in Japan, where books and articles on companien of thelt lenders hound. Freelance writers or former emplayees publish them, same times at Une request ofthe companies. Oe can find about two dozen boks on Honda or Soichiro Honda in major bookstores today, all of ‘hich help instil a strong erporate culture for Honda ‘An example of intemalization through “learning by doing” can be secon at Matsushita when it Ininched a companywide policy in 1998 to reduce yearly working time to 1.800 houra, Called MIT'S for “Mind tnd Management Innovation Toward 1888," the polly’ objective as ‘otto reduce cote but to innovate the mindset and management by "edusing working hours and increasing individual eretivity. Many de. partments were puzted about how to implement the pliy, which ws ‘early eammunicated as explicit knowledge. The MIT OS prometion of ‘hee advised each department to experiment with the policy fr one ‘month by working 150 hours. Through such a bodily experienc, em Ployees got to know what working 1,800 hours year would be like ‘An expliltconept, reducing working ime a 1,800 hours, was inter alized through the one-month experience. ‘Expanding the scope of bodily experience is critical to interaliza- tion, For example, Honda City project leader Hiro Watanabe kept say- ing “La’s give it a ty” to encourage the team members’ experimental spirit The fact that the development team was eros-functional en- bled ite members to len and internalize « breadth of development ‘xperienoe beyond thelr awn functional specialization, Repid rotor typing allo accelerated the accumulation of developmental exper ‘oes, which eas lead t internalization Contents of Knowledge and the Knowledge Spiral Ac alrvady explained, socialization aime atthe sharing of tacit know tego. On its own, however, iti a Limited form of knowlodge eration Unles shared knowledge becomes explicit, it cannot bo easly lever aged bythe organiation as a whole Alo, a mere combination of die {ete pieces of explicit information into x new whole —for example, ‘Comptroller of @ company collects information from throughout the Company’ and puts it tether in a finaneal report—doos not realy tstend the onganization’s existing Knowledge base, But when tai and texplict knowledge interact, as in tho Matsushita example, an innova tion emerges, Organizational knowledge creation is a continuous and “inane interaction between tact and explilt knowledge. This tnter- fasion is shaped by shifts beeen diferent modes af knowledge con- ‘arson, whlch ae in turn induced by aevral trigger (see Figure 33) Fir the suelalzation mode usually starts with building a eld” of| Inwraction, This fl fitate the sharing of ener’ exerienens ‘ol men p: Soma th errand as ‘Ronni gue oy wllocive rection o which sing app iste etaph analogy els tam member o aca hen TEs anovlege atin Shere bard to commune Third, the Snbinaon nao ie trggred by Cotworking” nowy crested ko lence ling knw rom ster sci ofthe organization, CME) tales them fue n new products seve ot anager ‘tecn, Panly, esi by dng guts naman ‘The emient a the Knoiedg eeted ty ach ole of knowledge conver i natural ferent ave Figur 9, Stellzation yes ‘Sha can be called “typed knowlege” nich a shared metal Toul and tecnial cis Tho tact sl of knending dough inte Mitta cman gmp veg, Praia te semcpal Knowledge’ The conceal By Ramo rs covey! Enology crested through the meteor af ‘Rutan Blain” andthe nalgy between «spre nd the hut 8 mum maximum, machine sino Conan hes tc gatemc nwwledge each 2 postpe and new eonpanent technol, The moromercanding program inte Kraft General Foods enple oa estemie Knowledge, whch codes real manoge tent ets as tcompenente Interaction pace operational Tinviode” abet, per memagenet, production pro ner ‘duc Sse end ply lamentation" boll experince of ‘orking 160 ours a month i the Matt cn an operational rowley implementation. "Pose contents af knowlege interact with each other inthe pra acu Figure 99. Keowedge sla 0‘tector (exmaeaton Rrowlodae Keowtecoe tae Speraiont ‘rato. nieage| —— Rowrdge ites Fiquro 34, Contents of knuwledge reste by tho fr modes, of Knowledge creation. For example, sympathized knowledge about sonsumers' wants may become explicit eoneeptual knowledge about a row-produet concept through sollization and extermalinaion. Sch, ‘omorptual knowledge becomes a guideline. for erating systemic kKowlege through combination. For example, new-product concept stcers the combination phase, in which newly developed and existing ‘ommponent technologies are combined to build a prottype. Systemic knowledge (eg. simblated production proces forthe new product) ‘tm into operational knowledge for mene production of the product ‘through internalization, In edition, experience-based operational knowledge often triggers a new cyeleof knowledge creation. For exam ple, the usery tacit operational Enowledge about a podct is often eo alized, thereby snitiating improvement of an existing produto de- ‘velopment ofan innovation. "Thus far, we have focused our discussion on the epistemological i ‘mension of organizational knowledge eretion. As noted fore, how ‘over, an organization cannot eeate knowledge by itself. Tait now! igo of individuals Io the base of organizational knowledge creation, ‘The organization has wo mabiliae tacit knowledge created and secu lated et the individual level. The mobilized tacit knowledge i "organi rationally” amplifed through four modes of knowledge conversion and ‘ryetalized at higher ontological levels: We call this the "knowledge Spiral" in which the interaction between tacit knowledge and ex nowladge wil heme larger im scale nei moves up the ontological Tevels. Thus, organizational knowledge creation im spiral process starting at th individual level and moving up through expanding com munities of teraction, that crosses setinal, departmental, divi ‘Sional, and organisational boundaries (ene Figure 3-9) Figure 35. Spiral of orgenzationalkaowledge creation ‘This procs is exemplified by product development. Creating a prod ‘ct eaneept involves a community of ineracting individuals with di erent backgrounds and mental models. While the members from the [RED department focus on technologies! potential, those fm the pro ution and marketing departments are interesied in ether ies, Only some of those different experiences, mental mols, motivations, ‘snd intentions canbe expressed in explicit language. Ths, Uh socal ination process of shaving tact knowledge i roquired. Moreover, both ‘ocilization and externaliation are necessary for linking individ? tacit and explicit knowledge. Many Japanese companies have adopted brainstarming eampe as tool fer that purpose ‘The product crested by this collective and cooperative proces wil then be reviewed for its coherence with mid-range and grand concepts [ven f the newly crested product has superior quality, it may enact with the divisional or organizational goals expresced by the mid-range fd grand concepts. What lo required is another progscs ate higher level to maintain the integrity ofthe whole, which Wil lead to another cele of knowledge creation in a larger content Enabling Conditions for Organizational Knowledge Creation Tho role ofthe organization in the organi proce i to provide the proper eonteat fr Its wll athe eeation and accumulation af knowledge at the indivi. ‘al level. In tht wetion we il discuss five conditions required atthe ‘organizational level to pramote the knowledge spiral Intention ‘The knowledge spiralis driven by onganizational intention, which is defined sa an organization's sepration to ite gale.” Birt to achieve ‘the intention mally take the form of strategy within busines st ‘ing. From the viewpoint of organizational iowdge creation, thee ‘sence af strategy lies in developing the organizational capability to 3e- (quit, create, accumulate, and exploit knowiedge. The most critical Clement of corporate stratgy isto conceptualize a vision about what Jind of Knowledge should be developed ond to operationalize it into a management system for implementation. "Por example, NEC viewed technology asa knowledge system when it developed core technology programs atta Central Research Labora: tories in 1976, At that time the company was engaged in thre m husinesies: communications, computers, and somiconductors. Because twas dificult to ordinate R&D of theca diffrent areas, it was neces: sry to gratp technologies ata higher and more abtractlevel—that is, [owledge. According to Michiyuki Uenohara, former execative vice president, “bave technologies’ were identified by forecasting product [roupe for a decade into the fare, inluding the extraction of techno. fogies common to and necessary for them. Synergstically related base technologies were then grouped into “cre technologies," sich a pat tem recognition, image processing, and VLSI. Since 1975, NEC has ‘expanded its core technology programs using autonomeus teams; today Ithas 36 core technology programs inaction. Tn ation, NEC devised concept ealled the “strategic technology domain” (STD) inorder to mateh coe technologies with busnossactiv- igs. An STD links scveral core technologies to create a concept fo product development. Ts, an STD represents not only a product do- fain but leo a knowledge domain. At present there are six STD: (1) Faction) materialndevices; (2) semiconductors: (3) materiladevies functional machinery, (4) comsnunicatione apatern; (8) knowledge information systems and (6) saflware. Those STDs interact with core technology programs ina matrix, as iMstrated in Figure 8-6. By com ‘ining core technology programe and the STDs, the knowledge bases ‘aU NBC are linked horizontally and vertically. Tarough this endeavor, NEC has attomptod to dovelop a corporate strategic intention of knowl: ‘ego creation at every organisational level Organisational intention provides Use moet important criterion for Judging the trthfulnen of a given plece of knowledge If ot for inten tion it would be impossible to judge the value of infermation or know edge persived gr created. At the organizational level, intention i 0 fen exproseed by organizational standards or visions that canbe used Figure 28, NEC knowledge demain. Source: NEC to evaluate and justify the ereted knowledge Ite nocesarily vale thden "To creat knowledge, sins organizations should foster thee plement hy forming a organza enti ad Froposig iets thom, Top or mile manager can draw organizational “Tatncon to the importanes of commitment to fundamental Values by Sidesing ruth fundamental questions ae "What uh?” “What fiman Bea of “What Uf?" Ths ect Is more organization than individual, Tatead of relying solely om naiduals! own thinking Sud bebeviony the srgateton am. rearent and. promote them {rough colecve commitment. Ax Pony (1058) ote, eammitment Undolee the human tnowledgecreating activi. Autonomy ‘The second conition for promoting the knowledge spiralis autonomy, ‘At the individual level all members ofan organization shouldbe al- owed to act autonomously as far a elreumstances permit. By allowing them to act autonomously, the orgeniation may increase the chance tl introducing expected opportunities. Autonomy alap increases the poanbty thet individuals will saotivate themacves to crate newknowlege, Moreover, autonomous individuals function apart ofthe holographic structure sm which the whole and each part share the ‘same information. Original ideas emanate from autonomous indivi Sls difluse within the team, and then hecone oganisstonal idea, In this respect, the selforganizing individual assumes e postin Usst tay be sen a8 analogous to the core of a series of nested Russian ‘ols. From the viewpoint of knowledge ereatin, such an organization {store likely to matntain greater fx minimum ert Cal specication" principe (Morgan, 1986) is met asa prerequisite for felfrganlzaton, and therefore autonomy is esrared as muchas po sible? ‘A knowlodgo-crating organization that secures eutonomy may also bo depetd as an “eutopletic system” (Maturana and Varela, 1980), ‘hich ean be explained by the following analogy. Living onganie, foms are composed of various organs, which are ogain made up of nt serous cella Helationships between system and orgohs, and between organ and cells, are neither dominato-subordinate nar whole-part Each uni lke an autonomous ell, controls ll changes securing on tinuously within itself Moreover, each unit determines its boundary through solfzeproduction. This slfveerential nature i quintessential to the autopoietic aystem, Similarly to an autopoictic aystem, autonomous individuals and {roaps in knowledge-renting organizations get their task boundaries by dhemselues to pursue Une ultimate goal expreseed inthe higher in tention of the organisation, In the business organination, a powerfl tool for ereatingeircumstances in which individuals can net utono- ‘ously is provided hy the selforgenizing tam.” Such a team should, be crosfunctional, involving members from a broad eros-ection of Alijerent organizational activities. Project teams with ern funetionsl diversity ar often used by Japenese ims at every phase of innovs- tion. As ilusrated in Table 2-3, mast innovation projet. teams con sisted of 10 to 30 mambors with diverse functional beckgrounds, such fs R&D, planning, production, quality control, sles and mrrleting, land cusiomer service. In moet companies there are 4 to 5 core mem. bers each of whom hes had a multiple functional career. For example the core mombers who developed Fuji Xero's FX-S500 have had a Teast three functional shits, even though they were only in their 208 a that time (se Table $-, ‘The eutonomous teem can perform many’ funtion, thereby ampli ‘ying and sublimating individual perspectives to higher levla, Hons, ‘Gr example, organized a cote fanctonal project taam t9 develop the City model that was eomposed af people from the sales, development, land production departments. Thi eystern was called the “SED eye: tem,” reflecting the sles, enginering, and development functions. Its Initial goal was to manage devolopment setvities more systematieally by integrating the knowledge and wistom of “rdinary people” instead unctionl Background f Proust Development Team Members es ae AD Pradaon Ning Putin Seri Ca Ober ia MamatiaBeie 6 8 Et » of relying on afew heroes Ie operation was very lexbl, The three ontional evens were sominally fretted and there was bul In Tearing proee that encodraged invasion into other areas, The ‘embers tly performed the following functions + procuring personnel, faites, and budget for the prodection ane + analyzing the automaile market and competition 1 etting a market target + tering a price anda production volume “Table $4, Corporate Careers and Educational Backgrounds of Core Murer fhe F800 Development ‘Teath Naze ares Fath win Pa Reree sprint Its Yeas Tecal Sorin Sato» Prac] > _——_‘Esatien Proc Plnning vo Pofet Managenest Kecehir Faita Marking Saf =» Produ Planning = Commerce Minas Kina Tea Serie Saf + Quality Guarani = Bll “ee Peto Exsinering un‘The actual work low required team members to collaborate with their callengues. Hiroo Watanabe th toam leeder, commented: lay lig he tun manta rh na ay Inti ay os arta here an ours ta vege ahs al {hema yaar tol ake Fgh, soa an sper, petal et sd ht dsc ests ued bo ‘Type Cin Figure 37 illustrates he rugby approach. Type A shows the ‘ny appa in which enc ps of the develo poe t {leerly separated and the baton is passed from one group to another ‘Type Bin called the “sashimi system at Pi Xerox cae looks like slice ae fah chind) served on plate with one ples overap- ping another ima, Nonaka, and Taeucs, 1988,p. 381 Fluctuation and Creative Chaos ‘The third organizational condition for promoting the knowledge spiral {nBaceustion and eetivechaon whieh stmulte the ineation bet {ween the organization and the exeral environment Flatt ie Ailorent fom complete diorder and charactors hy “order wiht reeuivenes"It an order whos patie is hard to predict atthe ‘toning (Cech 187) If ganizations apt an oe att ‘ward environmntal signals they cn exploit hose inal ambiguity, ‘elundancy, or nis inorder to inprove their ow krwwledge et ‘When fectstion i introced into an organization, se members face “bred of routines, habits, or cognitive famoworka. Wino. fd and Florer 1986) emphasie the Szaporeance ef sich periodic breakdowns in the development of human perception. A breckéown me Ll Figure 3 Sona (A vs oneriappd (Bad ) pes of developent ‘Stier Pate ond Ronatei refers to an interruption of our habitual, comfortable state of being ‘When we face auch a breakdown, ee have am opportunity to reconsider tur fundamental thinking and perspective. Th atber words, we begin to (Guestion the validity of our basic atitades toward the world. Such a roses requires deep personal commitment on tho art of the in idunl A breakdown demands that we turn our atlntion to dialogue ts a means of socal interaction, thus helping us to create new co ‘Sipts! This "continuous process of questioning and reconsidering ex {fling premises by individual member ofthe organization fosters onga- tstigaal knowledge creation. An environmental fuctuation often “aggers a breakdown within the arganization, out of which new knovwl- (ine can'be ereated. Some have called this phenomenon creating "or ‘Ser out of noise” or “rdar out of chaos." “Chaos is generated naturally when the organization faces » real cr- sig, such a rapid decline of performance due to changes in market feuds or sigaifcant growth of competitors. It can also be generated {Intentionally when the organizations leaders ty to esuke a "sense of ‘rsis” among organizational membors by proposing challenging goals. FRyussbure Keke, chairman of Cano, often says, “The role of top man fagement i to ive employees scnse of criss as well a a lft doa ‘Nonaka, 1986p, 142) This intentional chaos, whichis refered to a8 “Tentive chaos increases tension within the organization and fruses the attention of organastional members on defining the problem end ‘ecolving the criss situation, This approach iin sharp contrast the Tafurmaton pressing paradigm, in which 2 problem i simply given finda solution found through «process of combining relevant informa: tion based upon a preset gorithm. Such a process ignores the impor tancr of defng the problem tobe solved. To atin such definition, problems must be construct from the knowledge availabe st cer {hin point in Ue and context. “Tapanese eompanie often Tesort t the purposeful use of ambiguity and ereative chaos,” Top management often employs ambiguus ¥ ‘Tons or socalled “trategie equivcality”) and intentionally creates 3 ‘uctation within the orgenization. Nissan's CEO, Yutaka Kure, for rample, coined the cach praae “Lot's change the ow.” by which he {tied fo promote erestivty though an active investigation of alters tives to entablahed procedures. When the philosphy or vision of top Ianagement ia ambiguous, that ambiguity leeds to “interpretative quivecalty” atthe level ofthe implementing stall. i shouldbe noted that the beneBta af “creative chaos” can only be ealizol when organizational members have the ability to reflect upon Their acl, Without reflection, fietuation tends to Tend to “desta tee" chaon, Schin TOEB) capes thi key paint af ToTOwar “Whe Tan Pellets while in aston, he Becomes & rosearcher inthe prac {ice context. He is not dependent on he catoporis of established the try and technique, but constructs a new theory of the unique ease”6). The knowlege tating organization i required to insti tne cn “yan action ti TF management an lad to refection or questioning of alse promises as wal ano feual premises upor which eorrate decision making Is sochore. Vi emi neti In ar dna ptr thy make posible afar broader range of choice. Factal premise the ‘ther hand, are ohectve innate and del with how the rel wold cy provide a conrete but lite range fchoie ometiescrsiad independently of op management i- lop. An individual ongantaatonl member canst hgh gal arden leat him or heel or he tanto which eo he een. Fitoo Watanabesporvlt of the “idea car shallenging the “reeso: Ingo Detroit isan example of gal set high High gal, whether fet by top management of individual empleyee,ennee personal Commitment. Ar Taiys Kobayashi, the former chalga of Pate, eine ou high gree may tena india wider s wl Tate in sma i, o cn ayn say Win i os a sone the sang he if ond soul ‘Sires wit rc stooge we orld eve neve bo ast Sth bw Te teaye 188, p 7D In sum, fuctstion in the organiation can trigger erative chaos, hich induees and strengthens the subjective eommitment of individ: als Tn actual day-today operation, organizational members donot reg- ‘larly face euch a situation. Bt the example from Nisan has shown {hat top management may intentionally bring about Nucttion and allow “interpretative oguvocality" to emerge at lower levee ofthe ot= ianisation. This equiveclity acte as tigger fr ‘ndivsdual members {6 change their fendamental ways of thinking. I alsa helps to exter nalze their tai knowledge. Redundancy Redundancy isthe fourth condition that enables the knowledge spiral, to take place arganlzatonaly. To Western managers who ate preeco Pied with the ide of elicit information proesring or uncertainty eduction (Galbraith, 1979), the term “redundancy” may sound pernt tious becuse of its connetations of unnecesary duplication, waste of Information overload, What we mean here by redundancy isthe exit ence of information that goer beyond the immediate operational te ‘quirements of erganisational members, In business onganizations t- undancy fer to tention! overaping of ifrmation about usiness ectvities, management rerponabiities, and the company 8 busine . pd the company For organizational knowledge creation to take nlace. a conceot cre- ated by an individual or group needs to be shared by other individuals ‘tno may not need the concep immediately. Sharing redundant inne Iation proces the shering of tacit Knowledge, because individual an sonse what others ave tengo articulate In this sense, ru ‘ancy of information epeeds up the Knosledge-reaton proces, Red dhancy ls especially important in th concept devolopment stage, when Seis cea! to articulate images rooted in tact knowledge. At this age, redundant. information enables individuals to invade cock ‘hers funetional boundaries and offer advice or provide new informs: lon frm diferent perspectives, In short, redundancy of information. ‘rings about “leering by introsion” ata each individual’ sphere of perception ‘Redundancy of information ia also prerequisite to realization of MeCullch’s (1968) "priniple af redundancy of potential command’ that i, each part of an entire system carrying the same degree of i portance and having a potential of becoming its leader. Even within & ely hierarchical organiaation, redundant information helps bud “inusuel communication channels, Thus redundancy of information fa- tilitates the interchange between hierarchy and nonhierarchy.°” ‘Sharing extra information also helps fnaividals understand where ‘they stand in the organization, which in turn functions to control the irecton of individual thinking and action, Individuals are not unean- ‘need but loosely coupled vith each other, and take meaningfi posi- tions inthe whole organizational context. Thus redundancy of informa- tion provides the organization with atlf-control mechanism to keep it heading in a cetain direction. "There are several ways to build redundancy into the ergsnization One isto adopt an overlapping approach, as llustrated by Japanese Companies “rugby-ssle” product development in which diferent fone onal departaents work together ina “fu” division of labor Takew {Gh and Noneka, 1986) Some companies vide the product develop- tment team into competing groupe that develop diferent approaches £o the same projet and then argue over advantages and disadvantages of their proposals. This internal competition encourages the team to look tt project from a variety of perspectives Under the guidance of {cam Tender, the team eventually davelope a common understanding of the “best” approach “snother wey to build redundancy into the organization is rough a sratoge rotation” of personnel, eepeially between vastly different freus of technology or funetion# such ab R&D and marketing. Such fotation helps orgesizaional members understand its business frum Inultiple perspectives, thereby making organizational knowledge mae “Tid eo ener to put into practice, also enables each employee to diversify hero his ells and Information sources The extra informs tion hel by individuals oeross diferent functions helps the organiza tion expand itt knowledge-creation capac “One of the most olable characteristics of Japanese organizationscompared with their Western counterparts is the value placed on re- ‘lundant infirmation, Leading Japanese firms have insitutionlized redundancy within themeelves in order to develop new products and Services swf in response to fast-changing markets and technologies ‘Jeponete firma have als developed mang other organizational devices nue inerease end maintain redundancy. Among them are fequent rmectinge on both regular and ieegular bases (eg, Honda's brain orming camp or fama doght ka) and formal and informal commen fation networks (eg, drinking sessions ater working hours), These {Eves falta the sharing ofboth tact and explicit knowledge. "Redundancy of information increases the amount of information to te processed and et lead tothe problem of information overload It tla Increases the ost of knowledge eeaton, a leas in the short run (cig, deceased operational eficiony). Therefore, balancing between (Sonlion and processing of information is another important issue. One ‘Way to el with the possible downside of redundancy is to make clear ‘here information can be located and where knowledge is stored vrithin the organization. Requisite Variety "The Ah condition that helps to vance the knowledge spiralis raul site variety. Aesrding to Aahby (1960), an organtzations internal i ‘ersity mast match the variety and complexity ofthe environment in bre to deal with challenges poed by the environment. Onganiza- tonal members can cope with many contingencies i they posseesreq- ‘iste varity, which can be enhanced by eombining information differ fly, feniblyy and quickly, and by providing qual acess to Fnforation throughout the organization. To maximize varity, every= fone inthe orgenitation should be aswued ofthe fastest access tothe ‘rosdeat variety of necessary information, going through the fewest ‘eps (Numagami, Ohta, and Nonaka, 1989) ‘When information diferente exiee within the organiratin,ongs- iztionl members eannct interact on equal term, which hinders the eet fr diferent interpretations of new information. Kao Corp, Ja Dan leading maker of household podvets much as datorgonts, believes That all employees ehould have equal acces to corporate information Kao has developed computerized information network for this pur- pe, It has become the bess for opinion exchanges among various of Ennizaional units with different viewpoints "Keo has alo built an organtzational structure, shown in Figure 8 the computerized bly. Kao hnamed this structure a “biofunction-typo" of o "isecure, each organization unit works in union with ether units to ope with varios environmental factors and events, just as a living ‘igure 38, Kaa biefunctiontype ongunizatina trace, Shure Kao Cop anism would, Th human ody for example, rect instinetvely fo San ouching the par of the ody aecte. The message re itching by akties received by the brain, which orders the hand tev op glands alo go ita actin if pecesary. Kao regards ovement meh chan reaction an eel way t cope with the this ino ronment, Kao belloves this “iofuneion ype truce ST" Sina herrehy and foster organizational knowlds ere png ait ad exible ngaizational structure in which the Fr ered wi a inirmation network 0 WAS eileen un ar eon of the ernment. Anober ay tree eee Respeciad foctustions in the envionment and maintain guy ares wo change organizational structure frequent intra arcane rentritared its divisional reer three ies Matsa ee Toate, foquet ration of peanut enables in th raceme mltfuncioal knowledge, which helps them 0 employes ednetl potima and unexpected environmental fo cane a faaeyc raton of personnel canbe cen atthe uations, Sat totonal ‘Trade and istry (MIT, where the bu Mine aterm one jet the nxt every £0 JES Five-Phase Model of the Organizational Knowledge- Creation Process ‘Thus far we have looked teach of the four modes of knowledge con: ‘Tar pd the five enabling conditions that premote organizational Trsihute ceston, In thie eoetion we present an integrated, Sve Haare eStal ofthe orgenaational knowledgecreation process, usingthe basic construets developed within the Uneretical framework and Incorporating the time dimension into our theary. The mode, which ould be interpreted ae an ideal example of the proces, consists of five phases (0) sharing tacit knowledges (2) creating eoneopt; (juste ‘Hing conepis () building an archetype; and (6) erossleveling knowl ‘edge Soe Figure 3.) ‘The onganinatonal knowledge-creation proces starts with the sh ing of tact Knowledge, which coresponds roughly to socalzai fince the rich and untapped knowledge that reides in individu ‘ut first be amplified within the organization. In the second phase, tcl knowledge shared hy, fr example, «eolforganitng team is cone ‘ered to explet knowledge in the farm of now concep, a process ‘Siilar to externalization. The eestedeoncopt has tobe justified in the third pee, in which the orgaiaston determines ithe new eoopt is truly mort of pursuit. Reeiving the go-ahead, the concepts are con ‘ried in the fourth phase Sato an archetype, which ean take the form fa prototype in the case of “hard” product development trating mechanisth in the ease of “aol” innovations, such Cerparate value, novel managerial eystem, or an innovative onganiza- tonal structure, The last phase extends the knowledge ereatod in, for tvample, «division to others in the division, across to other divisions, for even to outside constituents ip what we term crosleveling of nowiedge, These ottzide conrituents include consumers ainted companies, universities, and distributor. A knowledgeereeting com: pany doesnot operata in a closed system but in an open system in Figure, Five phase male of the organizational nowledge-creston pc. hich knowledge is constantly exchanged with the outside environ Inent We chal describe each of the Sve phacus in more detail below. ‘The First Phase: Sharing Tacit Knowledge bhsis af organizational knowledge ereation, st sors natural the proces by focusing on tact knowledge, which isthe rch, untapped Source of new knowledge. But tacit knowledge eannot be eommun: fated or pamed onto others easly, since it Is acquired primarily through experience nd not easily expressible in words. Ths, the shar Ing of tact knowledge smong mttipi idividuls with different beck izmunds, perspectives, and motivations becomes the ertica step fr or {Eeizatonal knowledge creation to take place, ‘The individuals ‘Emotion, feelings, and mental medels have to be shared to build mu tual ru, "To eflec that sharing, we need a “Tela” in which individuals can Sneract with each other through face-to-face dialogues Ie is here that they share experiences end synchronize their bodily end mental ‘rhythms The typical eld of interaction is a selGorgunizng tam, in ‘Rhich mombers froma varioosfenctional dopartments work together to Tchieve a common goa. Examples of a saiforganiing team include ‘Matsushita's Home Bakery team and the Honda City team. At Mats hits, team members apprenticed themselves tothe head baker at the ‘Omnka Tateretional Hotel to capture the essence of kneading skill ‘rough bodily experience. At Honda, team members shared their mental models and technical sills in diseusing what an ideal ear Should evelve int, often over sake and away from the ofce, These texemplos show that the fist phase ofthe organizational knowledge: ‘reation poses corresponds to socialization, ‘hselCorganiing team facilitates organizational knowledge creation through the requisite variety of the team members, who experience ecundancy of information and share thei interpretations of rganiza- tonal intention. Management injects creative chaos by setting chal Ienging gals and endowing team members with a high degree of a- tonomg. An sulanomans team starts to st its own task boundaries td, au *boundary spanning unt” bogins to Sntract with the exter- rel environment, accumblating bath tact and explicit knowledge The Second Phase: Creating Concepts "The most intensive interaction between tact and explicit knowiedse ‘crurs inthe tecnd phase, Once s shared mental model i formed in the feld of interaction, the selforganizing taam then articulates it through furcher continous dialogue, in the form of collective rele: 1stion. The shared tacit mental model is verblized into words and ‘raves, ond finally erysallzed Into explisit concepts, In this sense, this phase corresponds to externalization. "This proces of converting tacit koowledge into explicit knowledge is facilitated by Ue use of multiple reasoning methods suchas deduction, fndsction, and abduction. Particularly useful for thie phase is abiue- tion, which employs figurative language suchas metaphors and anslo- fe, In developing City, for example, the Honda development team made sme ue of furative language such as “Automobile Evolu- fon “man-meaximam, machine-manimr,” and “Tall Bay” The gual- ‘ty of dialogue among team members can also be rased through the ‘se of dialectics which instills a creative way of thinking into the o {ganization It isan iterative and spiral proces in which entradetlons ‘nd paradoxes are utilized to ayathesize new knowledge. (Concepts are created cooperatively inthis phase through dialogue. ‘Autonomy helps team members co diverge their thinking fely, with intention serving ax tol to converge Cele Chnking in one divetion ‘Tocreate concepts, team members have to rethink thelr existing prem ises fundamentally. Requisite variety helps the team in thie regard ‘by providing diferent engles or perspectives for loking at a problem. Fluctuation and chaos, either from the outaide or insi, also help ‘members to change their may of thinking finéamentally. Redundancy tl information enables team members to underrtand figurtive Ian {rung beter and to crystallize their shared mental model "The ‘Thind Phase: Justifying Concepts {In our theory of onganinational knowledge creation, knowledge i de fined aa justified true belie Throfoe, new concepts created by indi ‘viduals othe team need tobe justified at some point inthe procedure ‘Ttieatian involves the proces of determining ifthe newly created ‘concepts are truly worthwhile forthe organization and society. Te ix Similar to sereening process. Individuals seem to be justifying oF ‘erecning information, concepts, oF knowledge eotinuously and uncon ‘souly throughout the entire process. The organization, however, ‘must conduc this Justifeation in a more explicit way to shed ifthe frganiational intention ia sill intact and to ascerain if the concept bring generated meet the needs of society at large. The most appro- Prints time for the organization to conduct this sereoning process ight after the concepts have been creat or business organizations, the normal justification eiteri include cot profit margin, and the dogre to which a product ean contribute to the firms growth, But juntifeation criteria ean be both quanttatis ‘and qualitative, For exazple, inthe Honda City case, tho “Tall Boy" ‘inept ad to be justified against tho wisi established hy top ma fgement—to come up with a product concept fundamentally diferent fom anything the company had done Before and to make ear that tras inexpensive but no cheap. I also had tobe justified against the Droduet-ine concept articulated by middle management —to make the far "man-maximum, machine-minimum.” More abstract erteria may Include value premiics ouch as adventure, romanticism, and aesthet js Thus justieation criteria need not be riety objective nnd feet, they can alo be judgmental and value-laden. In a knowiedge-ereatingcompans, iis primarily the role of top man ‘agement to formulate the justication entra in the form of organiza tonal intention, which is expressed in terms af strategy or ison. Mi dle management can also formulate the justifeation criteria in the form of mid-range eoncopts, Although the key justifation criteria are fet by top management, and to some extent by middle management, this dues not presiade ocher organizational units from having some fulonomy in deciding their own suberiteria, For example, a committee famprited of 200 young employees within Matsushita determinod ‘Mateusita emplavods in Ube twenty-first century should become ‘tary individuals” to adapt to expected socal changes, as will be d= ‘seed in more detail in the next chapter. To this extent, company’s ‘hstifestion criteria should be consistent with valve systems or needs ‘ofthe society at lange, which should ideally be reflected in onzanins onal intention. To ald any misunderstanding about the company’s Intention, redundancy of information helps Talitate the jantiSeation process. ‘The Fourth Phase: Building an Archetype In this fourth phase, the justified conorpt it converted into something tangible or caneete, namely, an archetype. An archetype can be thought of as a prottype in the ease of « new-produce development process In the caue of service or organizational innovation, an arche- {ype could be thought of se @ model operating mechanism, Tn either te, it i built by combining newly crested explicit knowledge with ‘sting expliet knowledge. In building @ prototype, for example, the ‘xplielt knowledge to be combined could take the form of technologies tr component, Becatce justified concept, which are explil, are cos ‘ertad into archetypes, which are also explicit, this phe is akin to combination ‘Jat as en architect builds @ mock-up before starting the actual eon- struction, oganizational members engage in building a prototype of ‘the real product ors mode of the actual system. To build a prototype, ‘they pall together people with dering expertise (e lity contro), develop specifiations that ‘f'a nevly created pruduct concept. To build a model, my, of a new Srganizational structure, people from the affected sections within the (eorganization, as well as experts in diffrent Sele (eg, human re- ‘Source management, legal, stratgie planning), ar esserbled to draw Up a new organiaational chor, job deseriplion, reporting system, ar ‘operating procedure, Ina wn, their role i similar to that of the rch teat—they are responsible for developing the blueprint as well a at tly building the new form of an onganizatonal emcapt. Attention to eal isthe key to managing this complex proces Because this phase is complex, dynamic cooperation of various de- partments within the organization i indigpeneable. BoUs requisite vax ‘ety and redundancy of information facilitate this proces. Organiza fiona intention aloo serves asa usel tal for converging the various kinds of know-how and technologies that reside within th organize: tion, aswell as fr promoting interpersonal and interdepartmentalco- ‘operation. On the other hand, autonomy and Muetuation are generally tot that relevant at ehis stage of the orponiztional knowledge ‘rention proces ‘The Fifth Phase: Cross-Leveling of Knowledge Organizational knowledge creation is @ never-ending prooas that up ‘rade ital continuously. Tt doesnot end once an archetype has bean fleveloped. The new concept, which has been created, juried, and ‘modeled, moves on to anew ele of knowledge ereation at a diferent ‘ntological level. This interactive and spral proses, which we call, ‘osrleveling of Knowledge, talkee place both intra-organiztion fd interonganizationally. TIntr-organiaationally, knowledge that is made real or that takes form ae an archetype can trigger 8 new cycle of knowledge creation, ‘expanding horizontally and vertically arose the organization. An ox ‘ple of horizontal croe fertilization can be eeen within Mateushita, Irhere Horse Bekery induced the eration of other "Basy & Rich" prod Set concets, auch aa fallysitomatie coffee maker within the tame division and a new generation of largesereen TV seta from another Avision. Ta Uhese cass, eros ferilzaion took place across diferent {celine within a division as well as across different divisions. An ex ‘ample of verial erosefertilization allo comes from Matsushita. The tlvelopmant of Home Bakery inepied Matshita to adopt "Homan ‘Beetonis” as the umbrella concept at the corporate level. This une bella concept opened up a serie of soul-tearching atvitis within the ‘company to adarest what kind of company Matsushita shouldbe in the century and how “human” Matsushita employees ean be ‘These activities culminated in the development of MITSS (Mind and Management Innovation Toward 93), which was instrumental in re: Shucing the numberof satel working hours atthe font ne to 1.500, hours thereby freeing up time for poop at the front line. In this ase, knowledge erated in ane division ld tothe adoption ofan umbrella oncep atthe conporste level, which in turn affeted the lives of em Dloyees a the font ine Tnter-organizatcnaly, knowledge crested by the organization can mobilize knowledge of elated companies, customere, suppliers, com Detitors, and others outside the company through dynamic interaction For example, an innovative new appreach to budgetary control devel ped by one company could bring about changes in an afiliatd com: Dany’ financial control system, which n ten may tegger a new round Grinnovation, Or a customer's resction or fback to a new-prodct imcept may initiate 4 neve cycle of product development. At Apple Computer for example, when product development engineers come up with deus fr new prodaets, they build a prototype that embodies those Teas and bring 1 dreetly to customers to sec their reaction. De- pending on Uh rection ot feedback, a new round of development may beunitiated. "For this phase to function effectively, iti xtential Unt each organi ational unit have the autonomy to take the knowledge developed ‘somewhere ele and apply it freely across diferent levels and bound: fries Internal Actuation, sucha the fequent rotation of personnel wil facilitate knowledge transfer, So will redundancy of information Td requisite variety, And i intrmorganizational crossleveling, org ‘ational intention wil act ar «control mechanism on whether or not mowed shouldbe erce-fertiied within the company Summary Recall that we started to develop our theoretical framework in this Chapter hy pointing ost the two dimensions~epistemologica and onta- logieel—of organizational knowiodge creation ‘ste Figure 3-1). The epistemological dimension, which is graphically represented on the ‘orticl ain is where knowledge conversion takes place between tacit knowledge snd explicit knowledge, Four modes of this conversion—#o- Calzaton; externalization, combination, and internalization were Giscussed. ‘These modes are not independent of each other, but thelr Interactions proce a spiral when time is introduced as the third i- Inension. We induced ‘ve organizational eanditions—intention, fluetuatiochaos, autonomy, redundancy, and requisite variety—that tenable (thas the term “enabling conditions”) the four modes to be ‘tanformed into a knowledge spiral "The ontological dimension, which is represented in the horizontal axis, is where knowledge created hy individuals ie transformed into Knowledge atthe group and organizational levels. Those levels are not indopendent ofeach athe, but interact with each other iteratively snd ‘ontinavusly. Again we introdveed time as he chird dimonsion to de e\elop the fiveshase procter of organicational knowledge ereation— “having tact knowledge, ereating concepts, justifying coneepts, uild- ing an erchotype, and efosleveling knowledge. Another spiral takes pleat the ontaogieal dimension, when knowledge develope at, for Example the projeet-tesm level ie transformed into knowledge atthe Aivisional level, and eventually st the corporate or inter organization level. The five enabling cnditions promote the entre process and fs ‘Mat tho spiral "The transformation process within thece two Knowledge spirals is the key to understanding our thoory. If we had a three-dimensional ‘chert, no could show thatthe knowledge spiral atthe epistemological level ses upward, whereas the fowiedge spiral at tho ontological level moves fom lef o right and back again tothe left in acyclic! ‘oti. And ofcourse, the truly dynamic nature of our theory can be depicted ae the interaction ofthe to knowledge spirals overtime, Innovation emerges out ofthese spirals. Notes 2. Shanon later comment: think parape the word information” coring mae trouble than ie worthy exept tht iis dia to fed Shue word tier anywhere nea ihe I oad be kept say i mind {hat nroation i oly sare ofthe iffuley in frnamting the [Gone prodoed ty tome tntraton ware” (usted by Hoa, 1986p. 1). ‘Besising 1000) mes that Shane's sastcement was analogous tlophone Ti whth i cleleted on tho Bi af ine and distance bt gives no insight {at thw entent of infrsation, and called Ball Tlopone ST inermaton, Drake {981 argue hat «eine thoory af ifemastion would be a theory ‘oat the content of ear meee, ota theory abou the frm in whic hin ‘Gotan eb 2 the imparance ofthe knowedge-aton relationship hae boon rons sine in the ten of artical ntelgyts, Por example, Grier 1989) exam Toul expert saesoge Knowledge that guides hei actions and hat ted fo develop tvs for seng ach Kowedge "Brown and Duguid (1061) work on “evolving communi of ratio” hows ow indus astsl aye of working a earning might be very Alten fom solatively gd ofa pace pelod bythe organization. frei, ntrmal erp evolve among individual eking tle part= Ular preiom or purring ofan commonly eld objetves. Membership in thes erupe i Scie by indvini abies to tae procially valuable ‘Rfortion, Or (880) argues hit members exchange Kees ad share mari ‘Srv “wari” thereby balding dared understanding ote cot. Sn end confusing infraton. Thus baowlege crenson icles not only n+ ute but ato Inarning that ean shape and develop approaches dally wo "For example, we recognina aur neighbor's foc witha sing able oe plain how te dase kn words Mereoer ene ear Tsing frm their facia expressions, but explaining tem in word ore dificult Put another Sv, eh sie vl impose to arate the feelings we gf our Telsbors fice, wear wll ware ofthe overall impressum or further cue ‘Soon tat Komviege, ee Plan (198) and Gelwik (197), "5"We dd not ncaa Polanyt In Chaptr 2. bens hel considered tinue In Weta nilowphy bec of ie view and ecru. Michael yi was by Tangy ad was the brother of Karl Paar, 0 sea eho maybe better keown athe author of Phe Gret Transformation. ‘che! Pole hmelf wae ese heist an amore to be vr hee fo the Nobel prio unl be tamed to phony at the ae of 80. Pans ‘sopy har flit oe exc agreements wath thew of “ater” Wi onsttn and elev Ponty terme of Sr emphasr oo ato, bl a fect kowiedge Fara dacanon on a aflltybweween Polanyi and Iter ‘Witgenstern ath gard fo tact nnd, ae OL 1970 Brown (1902) argues that "The orpoizatins af the fare will be seowlege rele in which enployeon Wl sythene understanding end ‘meprelatios fom th sa of afarmation tha rete of them fom ili see 3 las hngwindg rosary, be natin, workers ned cola fate with bth the pst andthe pron. Wheclabration with the present [Ehut shoring taut knowledge elaboration wih the pst Gras on exper he gned fo previous wave fing Wing owning to Maturana snd Varela (1880), "Th linguistic domain ws «| aoa sf ereningVhavir equiva least bo nrotng oan With omperabe domaine of interactons 9 that a cooperative tem of snes {ntractians ny bu developed in which the emerging conduct of he tro rea ins elvan fr th The ental etre of human existence et tecaren in Hogue cognitive comin. This domain seo fr pa) The ACT mol is conmnant with Rl’ (149) eategorizaton of kre- ge int knowing hat something “xia” and knowing “how” It epraes, ‘is, Squire 067) Utd eontandingtaxnomls with mere tha x dwn a ‘in’ uch "impli! yo Semple andl memory wet memory ow of there drtnctions sparta propriety grouped under "poe ff thon ot sla “Sdartive A survey sf 100 Jepanet ide managers was conducted tots the putes tet the kaowiedge even constrict i mpi of four kno ‘igs conversion prosnce saan, externaiation, combination, an {etalon Foto lodge fm frstranr ad second-order factor analyses ‘Goprzally validated the exztncefthwoe four conversion process Por {iE ace Nona, Byars Brac nd Konno (900. 10. For limited anaes of xteroalastio ome iewpla of information creation, ee Nanak (1987 "i Cannon-Bawer, Sas and Converse (1980) define “ehared mena od i as"knowlege stacbre old by mcbars af tsa that ene them firm scares expansions expectations forthe tac, and in tur, co {Tt tet ecuone and lap thelr havior demands ofthe task nd oer team member” (208), had ym their extensive rove of te erate tthe shed mental model and tei sare on fam dacion raking To erland how a shared rental model ir ested, the German philosopherase Georg Gada’ concept of “uso of horizon” bel, The conse we aarloed fr pilospial ermencser othe tay af methoelagy te Interpreting storia tat, Gade 180 argues that tre andartanding fata ise focal the inerpretar' andthe auth’ hain, He Sf {he oreo noth range vison that inlodes everything that can be sen Frome pvtaler vonage pot (902. Appling tis cone to our cntet, ‘recatarge thet sociation i sin” of prtlpants tact hrowleds Thee shred mental mode. 1 Propuing the conept of “eld epistsog,” Sehelen (1882) expe stom the Impuane of seven hth sa fring fl for samen hittanding, and contends hat cmatunsation the sialtancos sharing ‘inbrmatoneiting inte stustin. Smiley, Condon 976) argues that ‘Semcon se snulanes densest! phenomenon n whieh people fee's cheng veuring. share the sme sense of chang, and are moved to {Ske ston Ta oer word, he uo, communion hoa wave thet pases ‘touph poles bates ond cuminter when everonesychronizs with the ‘rove Fvom nodal peyeblogial perspective, Hoge and Abrams (199) ob- ‘irve that troup beheior ight be motivated bya Search for meaning ed & ‘Shere self concept 139). TS" Greamann 1900) views dslgue at mtiperectve contin. At ted before language aborenty related o ein, a sugested by te frm ‘pee sc Aurin, 190% Serle, 196), Dilogue,Uorefre, may te sen a= 1Thectve action, Moreover securing fo Kam, the wold rested by Ta {Bing and cenfing concealing the word 1 Intrewed on Jenry 25,184 15 Theo suthor cpa the importance of eating shared meaning fr eranaed acta, arguing that sna meanings” for nt experience oot {Sie developed to reste shared meaning in the organization, Metapba sno our mechani to develop oqinaluanings that they found through “heir daxguve anaee For tore dren abut metaphor and the other {hee mechonlmeopcal argument, afect modulation, and linguini ‘ete see Donal, Gray and Bougyn 88. “The flowing fem episode seater the proess. FA. Kl, a ceman semis, dove the chelate of bene hesaghal fing of carton siomechroagh deem of «sake siping is own tai. x ‘BOE cathe wank potern ees a map, and posse combinations ofthe alter bose enlogie far gan cher! compounds, Thos, Keke ‘Eloped the etrctral oda of orpnne chemistry Tr Rowrdine to Laka nd Joan (1960), “movtaphoe pervasive ine eye not unin angunge btn tough and eon’ (8 Ts infmaton and communications techcloie ue fortis purpon n- clade WAM [Val Add Nebwort} LAN (al Area Network), Bal (Ele ‘fume Ma, P08 Poin-oF Sle) etm, “Groupware” for CSEW (Computer ‘Sppored Cooperative Work, snd CADICAM (Computer-Aided Design feeturne 9. Inthe rad database eatem, data fom the Market Metre’ Sepemar et Sluis sytem which Invegrtes POS data fom supermarkets ton ti need casted data shopping bhvos prove by Tors oe Resoucoy and sole dna fom the ql Maketng Decor System's Microvision tahun or more information, se "Micro ferandining with KGR” Pood ond Bewrage Marketing, 10 po. 8 18, "Down af Brand Anapsin” Rood and Beverage Marketing, 10,2010 (191); Uh Paroerng?” Supermarket Basic, 46,9, 6 (90) Sn. Notsr 76) agus that cotton a knowing ad understanding car only inthe conte of prponfaatty. Fro an organnation tery perspectives nrooen, Weick (979) contends Uta organs nee {Stow ofensronmentl information hasan lament ef el uling popes, becuse the erantian hat tang wil to selatulize what wants some He calle ths purmmenan the wnscimen” af nvinment “2 Sean ftom the Simanian viewpoint sf "bounded rately” andthe ‘rin ht th ol th organization Ito prowas nformation fet, “ouoomy is merelye sure fmm and there not doable, The mtn ‘come mit esd eommonsensel ove that is dil ea. Thnecver wo spon the ese probe Fm Une Viewpoint that human te Tease on ued eat ain and erate Hwee, appear= {hat men beings know no bey in exereneng and ccumulsting ait Knowtetge Underlying that sosmaltion ft Knowledge i the sense of ‘purpose sn antnany Human bins often crest nce ntentonaly, thereby ‘reaming themes. "The tam shuld be tablished with due consertion of the pringpes ot eitoganzation sucht aring tear requis vrely, minimum eit Cal epctentin, and redundaney of ncn (Morgny, 1980) Requisite var Sy mi he dined inter "5 In er Haron Besines Review aril ented “The Now New Pedut ‘eelpeent Came” Takeuchi abd Nonak, 198), we argued tht in tolays Paeopoced nod ero competsive word, iis overlapping. rash SP prowthhs tremendous mer In tr f speed ad ex. A. Cibon 1979) hypotheses thet koowisdge is inthe envionment it seit contery loth tritonal epistemological view that I eit inside the ‘upan bai, Norman (1988 ager that knowledge exists nat only ise the Tat but at in tbe exeral or nth farm hing ether, and tne 5 Piaget (978) notes the inportance ofthe role of contradiction inthe interaction beonoen sabes ud envionment. The rst of eontractan, bea tussles inthe smrdiation betwen the potive and negative ie of cic erect or ehavion, whch in tur i ndapensable foe erating new ex Ste Sn According to the principle of order out fais” proposed by von Foes ter 1986, he efrpennng sysomn can irene sity to sursoe by Frosty introdveing sah ale Into Il Order inthe natural worl Trades mt only te state and eralized dor n which entropy 0 bot lho the “unable” oder in which now tractres ae formed by the working ater nd energy. The ltr i what Prgopoe and Steere 1980) call “Seder out of chor st tory of Snspative tractre, Tn an esutionary ‘lening peapetve, moreover, nth (190) argue“ contrat to widely id tlie plnning inom cvlatonry apn herefre dos acl nthe Foleo of uncertainty sod complet, atin their nesses Uncen [perms tecatse the epatsm f pnosdelteatly widened; imagination‘exes into play” (p 25. Researchers who have devsliped the che thay ve fu the eetive nature a have. Se, for example, lec (1987) and Waldop (1002) For ppieions ofthe cnos theo to anagerant, 6 oak 1085) and Zimmerman (193). 1 Using the tem “elerary” which epeans “no-herrey” Hedlund (0885) explsne the role of redundant Information a vehi problem Er ‘uation and kooladgecreaion on the bars of procedures dierent 0 ‘how fly pst by the organization. 8 The final jones of ereatd oncopts and thir realized fers, La, procs endorsers acu nth marketplace Creating Knowledge in Practice iitustrte the theoretical framework of organiztional know ‘edge eration presented in Chapter 3. Although a variety of re fences heve beon used to ilustrate each component ofthe theoretical Framework, ths chapter wil lartrate the entre process of knowledge trestion within @ single Japanese company. The Matsushite cae is tivded into to parts, The first part explains the development by Ma- tite of a bread-making appliance, Known as “Home Bakery.” and its subsequent elect thoughout the company. Ia the second part we ‘analyze the continuous proses of knowledge creation atthe corporate level of Mateosita, ‘Matsushita's Home Bakery isthe frst fllyeutomate bread-making machine for home use, introduced tothe Japanese market in 1987. Tt {ransforms raw ingredients int freshly baked bread, doing everything from kneading and fermenting the dough to actually baking bread of & ‘ality that omparee favorably wits what a profesional baker would ‘rede, All that is required is the mixing of fou, butter, salt, water, End yous, For eved further convenience, @ premeasured breod-mix Deckage can be used to save the trouble of measuring out the required Thrediests, The machine ix remarkable in that it embodies the skills tie master baler ina devicn that can be operatd easly by people ‘wth no knowledge of breed making It captures the skills of «baker in Such a way that the eiical dough kneading process, which previously T chapter sea the Matsushita Beer Industrial Co, Ltd, to 28. 2