The use of Corporate Knowledge in Gaining Leverage

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In the recent times, knowledge has emerged in the corporate world as a critical factor in moving ahead of the competitors. Strategy is designed according to the knowledge a company has. This essay will be arguing in favour of the argument and focus upon three main key areas like about knowledge and it's types, how the tacit knowledge or intuition can be externalised and importance of metaphors & analogy in the externalisation process. All the above areas are discussed using different models and by taking the Nonaka and Takeuchi case study on bread making machine as the main base. Hope you will enjoy reading it.

According to Nonaka and Huber, knowledge can be defined as the justified belief that strengthens any organization's capacity for effective action. Being invisible, it can be viewed as an object or any process (Alavi and Leidner, 2001). knowledge is considered as personal asset and shows the expertise in any field. Wah in 1999, reported that 99 percent of the work that people do in their daily lives is based on knowledge (Smith, 2001). '3M corporation ltd.' is said to be one of a most innovative companies because of having effective knowledge management system. (Cavusgil, Calantone and Zhao, 2003). Knowledge is context specific, which means that it must consist of a specific time and space otherwise; it will be like any other information. For example, '123 DEF Street' represents just information, which is without context. But, when it is reframed using context as 'My brother John lives at 123 DEF Street, which is next to library', becomes a form of knowledge (Nonaka, Toyama and Konno, 2000). According to Liss, knowledge management is a formal process which helps in determining the information a company is holding and that could be beneficial for other employees by making the information available. This process contains different steps like how the knowledge is being captured, then evaluated, stored, provided and finally used (Smith, 2001).

Coming to one of the important areas of the essay, Knowledge can be classified in two categories, as in the form of explicit and tacit. Among this explicit knowledge contains facts, rules or policies that can be easily coded and transmitted. It can be expressed formally and through systematic language without discussion. On the other hand, tacit knowledge or intuition contains highly personnel skill and hard to formalize. This form of knowledge contains subjective insights and hunches. Tacit knowledge cannot be easily communicated to others. To transfer tacit knowledge it needs face to face contact or through apprenticeship (Wyatt, 2001). Nonoka and Takeuchi has segmented tacit knowledge in two different dimensions. First is technical dimension, which deals with informal way and often procedural. The skills in this dimension are captured in the term know-how. Second is cognitive dimension, which helps in reflecting image of reality (what is) and also a vision for the coming future (what must be). Terms like metaphors, Intuitions, hunches, analogies, highly subjective and personal insights come under this dimension (Wasonga and Murphy, 2006). Nonaka and Takeuchi have recommended SECI model of knowledge conversion which can be classified under four modes. First mode is socialisation ie, conversion from tacit knowledge to new tacit knowledge with the help of shared experiences. Second mode is externalization (which is also a main key area in this essay), which is a process of articulating from being tacit into explicit knowledge through metaphors, analogies, models etc. This enables it to be shared by others and thus resulted as a base of new knowledge. For example, as someone tries to express an image by using some language. The third mode is combination that deals from conversion of explicit to be now more complex explicit knowledge and having systematic sets of explicit knowledge. The fourth mode is internalisation which is done by conversion of explicit knowledge into tacit knowledge. In internalisation, the explicit knowledge is shared throughout the organization and then converted into tacit knowledge by individuals (Alwis and Hartmann, 2008) (Appendix-1).

To demonstrate their concept and theory, Nonaka and Takeuchi illustrates using the case of the product development process of first automatic (Appendix-3). Bread making machine developed by Matsushita's electric Japanese company. With their previously manufactured machine which was not kneading the dough properly, As a result the bread was not cooking properly. The employees had analysed the problem through many ways, as even they compared X- rays of dough being kneaded by the professional bakers and through the machine, but nothing worked. At last the problem solved through proper articulation of tacit knowledge by Tanaka. We will discuss this case study in detail in different section of this essay (Nonaka and Takeuchi, 1995). Coming to case study and defining SECI model, in the first mode Tanaka who was software developer, has learned the skill through socialization, which means by observation and imitating the famous head baker of the Osaka international hotel and sharing his experiences, she had developed her tacit knowledge. The next mode is externalization, she articulated her tacit knowledge through metaphor by using phrase of "twisting stretch" into explicit knowledge so that, the engineers will not find difficult to understand the process. Combination came into place when the phrase of "twisting stretch" and technological knowledge of engineers combined together. This resulted in evolution of a prototype of home bakery. In internalization mode there are further developments of tacit knowledge by different engineers (Gibbert, Hoegl and Valikangas, 2007).

Taking of the last main important key area in this essay, Takeuchi clarifies that it is possible to convert tacit knowledge into explicit knowledge by externalization using metaphors and analogies. Talking about metaphors, they are the ways of perceiving or intuiting one thing using imagination of any other thing. They are generally conveyed through a word or phrase. Metaphors play as very significant tool in defining new concepts. Where as, analogy is defined as more structured process and helps in harmonizing the contradictions that are incorporated into the metaphors. Thus it can be stated that in between the pure imagination and logical thinking, analogy acts as a bridge. Taking example of case study, tanaka's analogy of comparing the baker's kneading motion with the motion inside the machine was being optimized by her fellow engineers. They added special ribs and set the motion geometry to make the kneading of dough same as that of the head baker (Abraham and Knight, 2001). Another good example of analogy can be the low cost development of canon's mini-copy machine. When Hiroshi the team leader, made his workers compare between the aluminium drum of photocopier and prosaic aluminium beer cans. The analogy of how it is possibilile to make beer cans at such a low cost to make them disposable, has resulted in the development of concept, which his team needed to make disposable drums of photocopier at low cost (Gibbert, Hoegl and Valikangas, 2007). There is another relevant model which can be applied in the case study named as the four I's model that deals in organization learning and includes four processes, namely intuiting, interpreting, integrating and institutionalizing being occurring at three levels like at individual, group and organization. Among these intuiting takes place at individual level due to it comes from within an individual. Intuiting is preconscious recognition of any pattern or the development of any possibilities inherent in during personal experience. Metaphors can be seen as a link which helps in converting individual intuitive insight into the form of shared interpretation. According to case study, Tanaka used the phrase "twisting stretch" to make interpret her intuition to the other engineers. After intuition the other processes follow (Crossan, Lane and White, 1999) (Appendix-2). The above four process can be merged in three cycle model. Each cycle tries to improve the result of the preceding cycle. The first cycle finished up with assembly of prototype which was not kneading the good quality of bread. This resulted in beginning of second cycle, in which according to case study, Ikuko Tanaka took the option of apprenticeship with the head baker. After this the third cycle came into motion, in which the other employees further improved the prototype developed in second cycle and finally made it into a commercial feasible product. Among all the above three cycles, the most important cycle to discuss is second cycle, in which Nonaka and Takeuchi observes their concepts of 'tacit knowledge' and it's relation to 'explicit knowledge'. Conversion of tacit knowledge has taken place in the second cycle (Tsoukas, 2003). As, in the second cycle, Tanaka tried to share the tacit knowledge of the kneading skill of that head baker to learn herself, so that later she can convert this knowledge into designing of the bread making machine. The master baker had the good skill of kneading the bread, which he also acquired after many years of experience. So, such experience is very difficult to express in words. To grasp this tacit knowledge of the baker required lot of imitation and practice to understand, Tanaka decided to train herself with that head baker. In the process of training she learned the kneading skills through observation, imitation and through practising it. However, she transferred her learned tacit knowledge to the company engineers with the help of using the phrase "twisting stretch" that can provide an image of procedure of kneading and also suggesting the right amount of speed of the propeller inside the machine by saying, "make it move faster", only then the engineers would able to set the specifications of the machine. The engineers interpreted her suggestion and made the changes. After one year of some trials and errors, the company finally able to launch the product successfully (Nonaka and Takeuchi, 1995). Finally, I conclude in the favour of the argument that, yes tacit knowledge can be externalised using metaphors and analogies. It's very important to frame them properly so that they can be understood by others and solve the purpose.

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