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levels of rivalry and chaos. Third, we conducted a survey is either (1) scarcity in the object of the competition of competitors is actor identity and the resulting perceptions of . Germany) become focused on transcending the requirement Many popular books warned of the rising clash between the two countries.
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But there is another way to think about knowledge and its role in business organizations. These companies have become famous for their ability to respond quickly to customers, create new markets, rapidly develop new products, and dominate emergent technologies. The secret of their success is their unique approach to managing the creation of new knowledge. To Western managers, the Japanese approach often seems odd or even incomprehensible. Consider the following examples:.

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In each of these cases, cryptic slogans that to a Western manager sound just plain silly—appropriate for an advertising campaign perhaps but certainly not for running a company—are in fact highly effective tools for creating new knowledge. Managers everywhere recognize the serendipitous quality of innovation. Executives at these Japanese companies are managing that serendipity to the benefit of the company, its employees, and its customers. Rather, it depends on tapping the tacit and often highly subjective insights, intuitions, and hunches of individual employees and making those insights available for testing and use by the company as a whole.


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Mobilizing that commitment and embodying tacit knowledge in actual technologies and products require managers who are as comfortable with images and symbols—slogans such as Theory of Automobile Evolution, analogies like that between a personal copier and a beer can, metaphors such as optoelectronics—as they are with hard numbers measuring market share, productivity, or ROI. The more holistic approach to knowledge at many Japanese companies is also founded on another fundamental insight.

A company is not a machine but a living organism. Much like an individual, it can have a collective sense of identity and fundamental purpose. This is the organizational equivalent of self-knowledge—a shared understanding of what the company stands for, where it is going, what kind of world it wants to live in, and, most important, how to make that world a reality.

In this respect, the knowledge-creating company is as much about ideals as it is about ideas. And that fact fuels innovation. The essence of innovation is to re-create the world according to a particular vision or ideal. To create new knowledge means quite literally to re-create the company and everyone in it in a nonstop process of personal and organizational self-renewal.

It is a way of behaving, indeed a way of being, in which everyone is a knowledge worker—that is to say, an entrepreneur. The reasons why Japanese companies seem especially good at this kind of continuous innovation and self-renewal are complicated.

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But the key lesson for managers is quite simple: Much as manufacturers around the world have learned from Japanese manufacturing techniques, any company that wants to compete on knowledge must also learn from Japanese techniques of knowledge creation. The experiences of the Japanese companies discussed below suggest a fresh way to think about managerial roles and responsibilities, organizational design, and business practices in the knowledge-creating company.

New knowledge always begins with the individual. A brilliant researcher has an insight that leads to a new patent. A shop-floor worker draws on years of experience to come up with a new process innovation. Making personal knowledge available to others is the central activity of the knowledge-creating company. It takes place continuously and at all levels of the organization. And as the following example suggests, sometimes it can take unexpected forms. In , product developers at the Osaka-based Matsushita Electric Company were hard at work on a new home bread-making machine.

But they were having trouble getting the machine to knead dough correctly. Despite their efforts, the crust of the bread was overcooked while the inside was hardly done at all. Employees exhaustively analyzed the problem. They even compared X-rays of dough kneaded by the machine and dough kneaded by professional bakers. But they were unable to obtain any meaningful data. Finally, software developer Ikuko Tanaka proposed a creative solution. The Osaka International Hotel had a reputation for making the best bread in Osaka.

Why not use it as a model? She observed that the baker had a distinctive way of stretching the dough. Explicit knowledge is formal and systematic. For this reason, it can be easily communicated and shared, in product specifications or a scientific formula or a computer program.

Tacit knowledge is highly personal.

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It is hard to formalize and, therefore, difficult to communicate to others. At the same time, tacit knowledge has an important cognitive dimension. It consists of mental models, beliefs, and perspectives so ingrained that we take them for granted and therefore cannot easily articulate them. For this very reason, these implicit models profoundly shape how we perceive the world around us.

The distinction between tacit and explicit knowledge suggests four basic patterns for creating knowledge in any organization. Sometimes, one individual shares tacit knowledge directly with another. For example, when Ikuko Tanaka apprentices herself to the head baker at the Osaka International Hotel, she learns his tacit skills through observation, imitation, and practice. They become part of her own tacit knowledge base. But on its own, socialization is a rather limited form of knowledge creation. But neither the apprentice nor the master gains any systematic insight into their craft knowledge.

Because their knowledge never becomes explicit, it cannot easily be leveraged by the organization as a whole. An individual can also combine discrete pieces of explicit knowledge into a new whole. For example, when a comptroller of a company collects information from throughout the organization and puts it together in a financial report, that report is new knowledge in the sense that it synthesizes information from many different sources.

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But when tacit and explicit knowledge interact, as in the Matsushita example, something powerful happens. It is precisely this exchange between tacit and explicit knowledge that Japanese companies are especially good at developing. When Ikuko Tanaka is able to articulate the foundations of her tacit knowledge of bread making, she converts it into explicit knowledge, thus allowing it to be shared with her project-development team.

Another example might be the comptroller who, instead of merely compiling a conventional financial plan for his company, develops an innovative new approach to budgetary control based on his own tacit knowledge developed over years in the job. Other employees use the innovation and eventually come to take it for granted as part of the background of tools and resources necessary to do their jobs. In the knowledge-creating company, all four of these patterns exist in dynamic interaction, a kind of spiral of knowledge.

Next, she translates these secrets into explicit knowledge that she can communicate to her team members and others at Matsushita articulation. The team then standardizes this knowledge, putting it together into a manual or workbook and embodying it in a product combination. Finally, through the experience of creating a new product, Tanaka and her team members enrich their own tacit knowledge base internalization. In particular, they come to understand in an extremely intuitive way that products like the home bread-making machine can provide genuine quality.

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That is, the machine must make bread that is as good as that of a professional baker. This starts the spiral of knowledge all over again, but this time at a higher level. The new tacit insight about genuine quality developed in designing the home bread-making machine is informally conveyed to other Matsushita employees.

They use it to formulate equivalent quality standards for other new Matsushita products—whether kitchen appliances, audiovisual equipment, or white goods. The reason is that both require the active involvement of the self—that is, personal commitment. The U. Decentralized conflicts will occur within, among and across borders catalyzed by a super-connected strata of web-enabled devices.

From a nation-state perspective, increased chaos and conflict will force the U. This paper suggests the latter is untenable for Political partisanship, increasingly sharp social cleavages, and rising perceptions of income disparity all shape the type of strategic vision possible for the U. Therefore, seeking efficiencies within the system that can apply the right solution to the right problem at the right time will require more than a whole-of-government approach; they require a paradigm shift to embark on only the most prudent endeavors out to Divisions in Europe, the resurgence of global power politics that coincides with more diverse and potent non-state actors and potential threats, megacities, and implications of failed or failing cities as a subset of failed or failing states, are part of a growing list of complex problems.

All these indexed issues pose a significant security and governance challenge, and economic threat to the U. This complex environment requires deterrent and nuanced military approaches to compete in the Gray Zone, prevent conflicts where possible, and keep others manageable, or winnable when not. The consequences of these future trends have specific impacts for the U.