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Long Range Planning

33/1 February 2000



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Knowledge Management

I. Nonaka, R. Toyama and N. Konno SECI Ba and Leadership: a Unified Model of Dynamic Knowledge Creation nonaka@mex.jaist.ac.jp

    Despite the widely recognised importance of knowledge as a vital source of competitive advantage, there is little understanding of how organisations actually create and manage knowledge dynamically. Nonaka, Toyama and Konno start from the view of an organisation as an entity that creates knowledge continuously, and their goal in this article is to understand the dynamic process in which an organisation creates, maintains and exploits knowledge. They propose a model of knowledge creation consisting of three elements: (i) the SECI process, knowledge creation through the conversion of tacit and explicit knowledge; (ii) ‘ba', the shared context for knowledge creation; and (iii) knowledge assets, the inputs, outputs and moderators of the knowledge-creating process. The knowledge creation process is a spiral that grows out of these three elements; the key to leading it is dialectical thinking. The role of top management in articulating the organisation's knowledge vision is emphasised, as is the important role of middle management (‘knowledge producers') in energising ba. In summary, using existing knowledge assets, an organisation creates new knowledge through the SECI process that takes place in ba, where new knowledge, once created, becomes in turn the basis for a new spiral of knowledge creation.

D. J. Teece Strategies for Managing Knowledge Assets: the Role of Firm Structure and Industrial Context teece@haas.berkeley.edu

    In today's economy, competitive advantage flows from the creation, ownership, protection and use of difficult-to-imitate knowledge assets. This shift in thought derives from the fact that these assets are not easily traded. In fact, in the absence of markets, the focus is on building knowledge assets in-house. The need for knowledge transfer, both internal and external, is not, however, resolved through IT alone. Since knowledge is often embedded in operating rules and practices, there is an important tacit dimension which is difficult to transfer without the transfer of people. At the same time, it is important to acknowledge the contrary, that codified knowledge is both easier to transfer and harder to protect. What, then, are the structural implications? With competitive advantage increasingly derived from intangible assets, firms must be entrepreneurial — both highly flexible and responsive — to be successful. At the same time, if hierarchy is antithetical to the performance of knowledge-based firms, then employee confidence and motivation is gained through the use of performance pay and equity-based systems. Nevertheless, context is important where, in an environment of increasing returns for example, the role of knowledge management is of major importance irrespective of the nature of the appropriability regime. Context aside, companies slow to respond to this paradigm shift can expect to experience a decline in performance.

P. J. Buckley and M. J. Carter Knowledge Management in Global Technology Markets: Applying Theory to Practice pjb@lubs.leeds.ac.uk

    Knowledge management has become one of the most widely promoted management ideas of all time. It is perhaps more than a passing fad, suggesting a real convergence of theoretical and practical ideas about the firm. Ideas developed to explain strategic success are being used to design strategies which improve the firm's ability to capture more of the potential value from the knowledge which they and their members have or can acquire. A central issue in effective knowledge management is how knowledge resources — the specialised groups or individuals who hold the firm's knowledge separately — can be organised so that collectively they realise the best possible value to the firm. This article provides an outline of the theory of knowledge in business and describes and analyses two matched but contrasting case studies of knowledge management activities which illustrate the impact of theory on practice. The two case studies reveal alternative approaches to the balance between increased division of specialised labour, reflected by internal boundaries, and the combination of expertise within internal boundaries.

Other Topics

M. Goold and A. Campbell Taking Stock of Synergy: a Framework for Assessing Linkages between Business michael.goold@ashridge.org.uk

    For multi-business corporations, a key issue is when, how and how far to extend linkages between the separate business units in the search for synergy. Many companies are attracted by the idea of auditing how well their synergy management is working, but this can be a daunting task. It is all too easy for a review not to bring to the surface the changes that are really needed, to get bogged down in excessive detail, or to fail to create a realistic but innovative agenda for action. This article provides a framework for companies that wish to conduct an audit of how well their approach to synergy management is working. The framework, which has been used successfully by several companies, provides a practical and systematic way of pinpointing unrealised opportunities and creating an agenda of initiatives for addressing them. A detailed illustrative example shows how the framework was used in a specific company.

S. H. Ang, S. M. Leong and P. Kotler The Asian Apocalypse: Crisis Marketing for Consumers and Businesses fbaangsh@nus.edu.org

    The last few years have seen a dramatic recession in Asia, which has affected consumers and both domestic and overseas firms doing business there. This article looks at the behaviours adopted by consumers in reaction to the economic crisis, and how these impact upon businesses. Analyses of consumers from various Asian countries indicate falling confidence and a tightening of belts during the recession. Consumers have adopted various strategies to tide them over the economic crisis. These include changes in their consumption and decision-making patterns, buying different products and brands, and different shopping patterns and attitudes to advertising and promotion. These consumer spending strategies impact upon the marketing strategies of businesses. Ang, Leong and Kotler discuss effective marketing strategies for companies doing business in Asia during the recession, drawing lessons for both domestic and international businesses.

CEO Interview

James Kelly An Interview with Sir Brian Pitman, Chairman, Lloyds TSB Bank. james.n.kelly@cgey.com

Philip Stiles Bernard Taylor: A Retirement Tribute

Book Reviews

Review Briefs

Executive Summaries

This issue is available in full on-line at www.sciencedirect.com

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