Introduction: Why We Need a Theory of Knowledge Creation
Knowledge , according to Drucker (1993, 183), is āthe only meaningful resource today.ā Knowledge creation theory originally arose out of case studies of Japanese manufacturers in the 1980s. Since then, the scope of research has been extended to multinational firms as well as small and medium enterprises (SMEs) both inside and outside of Japan and now includes NPOs, government organizations, communities, regions, and nations. The theory has also developed substantially by synthesizing interdisciplinary theories and concepts in philosophy, psychology, cognitive science, and neuro-scienceāto name a few. This has led to the emergence of a āKnowledge School ,ā a group of scholars and practitionersāincluding many of the authors in this volumeāwho have been developing a knowledge-based theory of management that promotes sustainable innovation. Accordingly, knowledge creation theory is now able to explain organizational processes and leadership that promote knowledge creation in any organization, regardless of the organizationās type, size, or location. This means that the twenty-first century has become an era of knowledge creators.
Based on these developments, since 2004, the Japan International Cooperation Agency (JICA) and the Graduate School of International Corporate Strategy at Hitotsubashi University (Hitotsubashi ICS) have been jointly conducting annual seminars with ASEAN government leaders on knowledge creation theory and management practices. The total accumulated number of participants now exceeds 150 from over 10 countries. The participants have been taking on the challenge of incorporating knowledge creation theory into their daily operations. Following the vision and purpose of this seminar series, JICA, GRIPS, and Hitotsubashi ICS started a joint research project in 2013, with the hypothesis that knowledge creation theory is a perfect fit for ASEAN countries, in contrast to management theories prevalent in the West.
In this chapter, we present the basic concepts and frameworks of knowledge creation theory that provide a foundation for interpreting the cases in Chaps. 2ā8.
Organizational Knowledge Creation Theory
Before we go into the details of knowledge creation theory, we must point out that the theory differs from conventional theories of management in multiple ways. For example, it starts from the view that personal beliefs are established through relationships with othersāthat is, such beliefs are based on subjective rather than objective knowledge. The goal is to achieve value creation through practice, rather than analysis of past data. It incorporates diversity as existing in an ecosystem, which stimulates the creation of new knowledge. It is based on philosophy rather than mere economics. In short, organizational knowledge creation theory is an art rather than a science, dynamic rather than static, a process rather than a thing, a flow rather than a stock, flexible rather than rigid, practice-based rather than analysis-based, and inclusive rather than extractive.
Accordingly, one of the distinguishable differences between conventional theories on management and knowledge creation theory is evident in the definition of knowledge . Knowledge, defined as a ājustified true beliefā in Western philosophical traditions, has been regarded as universal, scientific, logical, and rational, following the traditions of Plato and Descartes. Considered in relation to knowledge creation theory, āexplicit knowledge ā can be regarded as the only form of knowledge in the West.
Here, we emphasize the importance of ātacit knowledgeā over explicit knowledge , through an understanding that tacit knowledge is the foundation of all knowledge. This resonates with arguments made by Michael Polany , a Hungarian-British polymath who made substantial contributions to physical chemistry, economics, and philosophy. He articulated that all knowledge is either tacit or rooted in tacit knowledge (Polanyi 1966). We also concur with the words of Augustine the Hippo that ābelief precedes knowing.ā Our beliefs and commitments are the sources of our knowledge, which is founded on tacit knowing . This means that knowledge is not something out there to be discovered or captured, but something we create inside ourselves.
Incorporating this understanding of knowledge, we can define knowledge as a dynamic social process of justifying personal belief toward truth, goodness, and beauty (Nonaka and Takeuchi 1995, 58). An important point here is the role of subjectivity . Our subjectivity determines our beliefs, our judgments, and our commitments. People create knowledge through interactions between themselves and with their environment. Thus, knowledge is not just something already out there waiting to be foundāif it is already out there, it is merely information. Because human interactions are the source of knowledge creation, knowledge is subjective, process-relational, aesthetic, and created in practice; we view knowledge and the knowledge creation process as people-centered, action-oriented, and rooted in philosophy (Nonaka et al. 2008, 7). This is our essential understanding of knowledge.
Tacit Knowledge and Explicit Knowledge
As noted above , knowledge is often defined as a ājustified true belief ā in Western epistemological traditions, with a particular emphasis on the connotation associated with the term ātruth.ā This understanding goes as far back as the ancient Greek philosopher Plato , in his examination of the development of objective thought . He insisted that unless we purify ourselves from bodily senses, we cannot come close to true knowledge (Gibbs 2005). On the other hand, Platoās apprentice, Aristotle, considered subjectivity to be an important aspect of knowing.
A good illustration of the differences between Western and Eastern thinking can be found in a drawing by Raphael in āThe School of Athens.ā In this drawing, Plato and Aristotle are seen in the center. Plato is pointing toward the sky, representing his deductive idealism. This indicates that universal quality resides in the ultimate āformsā that exist above us. By contrast, Aristotle holds his hand over the earth. This represents his inductive pragmatism that universal qualities lie here on Earth, and our five senses are compulsory vessels that allow us to perceive such universal qualities.
While much of Western thinking has largely been rooted in Platonic ideas and passed down to contemp...